FOCUS: Weak global demand keeps SHFE aluminium price near multi-year lows

Aluminium prices on the Shanghai Futures Exchange hit fresh multi-year lows this week amid persistently weak demand from consumers in China and abroad and a worsening novel coronavirus (2019-nCoV) pandemic - a dynamic that market participants expect will continue in the coming quarter.

The front-month aluminium contract on the SHFE closed at 11,310 yuan ($1,593) per tonne on Monday March 23, down by 635 yuan per tonne or 5.3% from a close of 11,945 yuan per tonne on March 20. The latest close is down by 23% from a peak of 14,700 yuan per tonne on January 15 and marks the lowest daily close since March 2016.
While aluminium prices in China are down amid the weakened demand at home and abroad, inventories are climbing; SHFE aluminium stocks rose for a tenth consecutive week last week, increasing by 14,452 tonnes to a near one-year high of 533,994 tonnes on March 20. Stocks are now almost three times higher than they were at the start of the year (188,027 tonnes on January 3).

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