Low aluminium prices offer automotive an opportunity

Aluminium manufactures, much like their counterparts in steel, face continuing issues of oversupply from China, which provides over half the world’s aluminium. Prices have gradually recovered from the seven-year lows experienced towards the end of 2015, climbing from US$1,423/t in December 2015 to US$1,603/t in March 2016. However, this remains low compared with the heights reached in 2014 of over US$2,000/t. Lightweight metal company Alcoa announced full year revenue of US$22.5bn for 2015, a 6% year-on-year drop. The company’s upstream operations required significant restructuring, and over the year it closed or curtailed 25% of its smelting capacity and 21% of its refining capacity.