Aluminum Prices Fall Amid Record Chinese Production
Aluminum prices have dropped below $2,600 per metric ton, driven by concerns over weak seasonal demand and rising production levels in China. According to official data, Chinese aluminum output reached record highs in November, totaling 3.71 million metric tons. This equates to an annualized production rate of 45.3 million tons, coinciding with a period of typically slower demand due to reduced construction activity during winter. As of now, LME three-month aluminum is trading down 1.2% at $2,533.50 per metric ton.
ING analysts noted that the surge in Chinese production is weighing on aluminum markets, especially as demand expectations remain subdued in the short term. Market participants are closely monitoring the supply-demand dynamics as production levels continue to rise.
Gold prices are trending lower ahead of the Federal Reserve’s upcoming policy meeting, with futures slipping 0.4% to $2,652.75 per troy ounce. Traders are awaiting signals on the U.S. central bank’s outlook for 2025, particularly regarding the pace of anticipated rate cuts. While a 25-basis-point cut is largely expected, uncertainty surrounds the extent of further monetary easing.
Recent U.S. PMI data showed stronger-than-expected growth in the services sector, reinforcing analysts’ views that the Federal Reserve’s rate-cutting cycle in 2025 may be more gradual than previously anticipated. “The resilience of the U.S. economy supports our view that the Fed’s 2025 rate cutting cycle is likely to be shallow,” analysts at ANZ Research commented.
Gold appears to be in a consolidation phase following its record high of $2,716 per ounce on October 31, according to Kelvin Wong, a senior market analyst at Oanda. Technical analysis suggests the potential for a multiweek corrective decline, with key support levels at the 200-day moving average. A break below $2,537 per ounce could deepen the decline toward support in the $2,415-$2,484 range. Conversely, a rally above $2,716 would invalidate this corrective outlook and suggest renewed bullish momentum. Spot gold is currently down 0.1% at $2,649.83 per ounce.