North American aluminum mills reported a slight but significant uptick in orders in May from the previous month, suggesting that the market might have reached bottom after nearly two quarters of slackening demand. “We are finally seeing some stabilization, some signs of maybe an increase,” one aluminum trader said.
Extruded products led the charge with orders up 5.3% in May over April. Sheet and plate orders were also on the rise in May. Orders for domestic can stock increased 2.6% in May, with U.S. and Canadian aluminum mills reporting a 3% increase in demand from April. “(Aluminum’s) doing really well. This has been a sharp, sharp spike and it’s consolidating really nicely,” one LME ring trader said.
“The U.S. government is spending money on infrastructure projects and that might be beginning to feed through to aluminum demand, but I still think recovery is a bit tenuous at the moment. The best we can say is there’s been a bottoming out – we’re at the end of a destocking phase,” David Wilson, director of metals research at Societe Generale, said.
Aluminum stocks rose a net of 2,375 tonnes, taking total inventories in LME-approved warehouses to 4,277,775 tonnes as of Tuesday morning.
Excerpts from American Metal Market, June 10th, 2009
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