To the relief of the construction industry and car makers, among others, the price of aluminium fell yesterday after spiking to a record of US$3,327 (Dh12,220) a tonne on Monday. The lightweight metal, which is widely used in insulation and energy-efficient windows as well as fuel-efficient vehicles, rose in response to concern over the possibility that production at major smelters in China could be disrupted by a shortage of electricity. By midday yesterday in London, however, prices had fallen to $3,276 a tonne.
Analysts said the record price was unwarranted, as markets were holding large inventories and Chinese production had not yet been seriously affected. "Traders are getting a bit too excited about what is actually happening in the physical market," said Dan Smith, a metals analyst at Standard Chartered in London. Mr Smith said inventory levels stood at a four-year high of one million tonnes out of a global annual market of 40 million tonnes. He predicted prices would stabilise at $2,950 a tonne in three months.