Aluminum does not have “significant room for further downside” amid potential closures among Chinese producers as falling prices may trigger output cuts, according to Goldman Sachs Group.
“Although we have not seen many price-related cuts in capacity as yet, we believe that if prices continue to trade around their present levels, in China we will see closures over the coming 1-2 months,” Goldman said in an e-mailed report dated today.
Still, overcapacity, especially in China, will cap any rally prompting a downward revision of the 12-month forecast to $2,400 a ton from $2,650 a ton, Goldman said. The three-month and six-month targets were kept at $2,300 and $2,400, respectively, it said.
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