Thursday, December 11, 2008

Remember the JHSV Contract Awarded Overbudget?

In follow-up to: JHSV Contract Awarded Well Over Budget and Aluminium and Steel Price History.

From the Financial Times, Dec. 4-5, Aluminium prices and the outlook have come down even more in the past month from when we last looked at it:

"...In the base metals market, aluminium prices sank below the $1,600 a tonne level, reaching a four-and-a-half year low, amid mounting gloom about the outlook for prices and the future of the industry. The benchmark London Metal Exchange three-month aluminium contract sank 2.2 per cent to $1,580 a tonne yesterday, the lowest level since May 2004. Aluminium has fallen 53.2 per cent since hitting a record $3,380 a tonne in early July. Stocks of aluminium at LME warehouses increased by a hefty 19,500 tonnes yesterday and have risen to 1.86m tonnes, the highest level for fourteen years. Rising inventories, which reflect the deepening downturn in global industrial activity, particularly in the carmakers and construction sectors, have weighed heavily on aluminium prices. “The industry is struggling to cope with both an overhang of spare capacity and a huge level of unconsumed inventory,” said Dan Smith, metals analyst at Standard Chartered. An estimated 65 per cent of aluminium smelters worldwide are estimated to be losing money at current price levels...Standard Chartered is forecasting that aluminium prices will average $1,825 a tonne next year, rising to $2,000 in 2010."

That's between 35 to 53% below what would have been budgeted for the aluminium.

Not expecting much from Obama "reformers,"
Aloha, Brad

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