Aluminum prices drop on signs of high China supply

NEW YORK: Aluminum fell, capping the biggest weekly drop in 14 months, on signs that increasing output in China will add to a global glut. Global output increased 5.7 per cent in January from a year earlier to 3.917 million tonne, the International Aluminium Institute said February 20. Chinese production surged 16 per cent, the IAI figures showed. Production exceeded demand by 419,400 tonne last year, figures from the World Bureau of Metal Statistics showed this week.

"The high production is not helping reduce the supply surpluses on the global aluminum market, which are still reflected in high inventory levels," Commerzbank analysts including Frankfurt-based Daniel Briesemann said in a report. "The high supply is likely to block any significant increase in aluminum prices."