Reuters reported that aluminium prices fell more than 4 % to the lowest level since September 2003 after a 51,875 tonnes jump took London Metal Exchange inventories closer to record highs.
Aluminium was last bid at USD 1,425, down from USD 1,470 per tonne at the close on Friday. It earlier fell as low as USD 1,415.
Mr Justin Lennon, an analyst at Mitsui Bussan Commodities said that “We're already somewhat into the production cost-curve and as more inventory goes in, there is just going to have to be more closures.”
He added that “Until you have some demand to bleed down inventories by consumers, then new aluminium production is probably just going to be put on the exchange.”
Aluminium used in transport and packaging has slumped more than 50% since a record USD 3,380 a tonne in July 2008.
The size of the increase in aluminium stocks surprised some market watchers who had expected the growth of stocks to slow after rising more than 500,000 tonnes in December 2008.
