Aluminum now technically in bull market

 Aluminum prices have “officially entered into a technical bull mode” after prices closed above the 200-day moving average for two consecutive days and also met other key technical standards, said Harbor Intelligence in a research note.

 

 

“Since 2003, when these conditions have been met, LME aluminum prices have experienced a longer-term upward move with an average increase of $750 per mton (37 cent/lb). The Fear/VIX index has fallen below key thresholds and is consistent with strong physical primary and secondary demand in North America and resumption of sustainable but modest growth in Europe and China,” Harbor added.

 

 

Meanwhile, Harbor says, some 3.5 million metric tons per year of utilized capacity around the world has been or is in the process of curtailment or disruption, amounting to 7% of global demand.

 

 

Also, Harbor said, large London Metal Exchange inventory levels are “seriously misleading” since much of the metal is not available to the market and is tied up in financing deals. Harbor looks for $2,400-per-metric-ton aluminum by the end of April and $2,600 before end of the year.

 

 

So far Monday, three-month LME aluminum has been as high as $2,335 a metric ton, its strongest level since September. The 200-day moving average lies around $2,309. Harbor notes the metal is up 16% since it its models triggered a “tactical buying signal” in early January.