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Mining Weekly reported that half of the world’s aluminum smelters are not profitable and more smelters may be forced offline if prices fall to $1,200 per tonne, as per a report by BofA Merrill Lynch Global Research.

Mining Weekly reported that half of the world’s aluminum smelters are not profitable and more smelters may be forced offline if prices fall to $1,200 per tonne, as per a report by BofA Merrill Lynch Global Research.
As quoted in the market news:

Research had found. Aluminium prices had continued trading lower in recent weeks, falling below $1 500/t on Thursday. “In our view, the recent dynamic is testament to the ongoing challenging fundamental backdrop.
This has perhaps been most visible in the reluctance of China’s aluminium producers to curtail output; in fact, partially supported by subsidies, the country’s smelters have increasingly delivered into the deficits created by production discipline from smelters in [the rest of the world],” the global commodities research team reported.
BofA believed that sharply higher Chinese shipments were partially the result of inflated physical premiums through 2013/14. While China’s aluminium exports had now stabilised somewhat, headwinds to aluminium quotations might persist in the near term, especially if some market participants released working capital and dumped unreported stocks into London Metals Exchange warehouses, the analysts noted.

Click here to read the full Mining Weekly report.

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