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NEW YORK (Scrap Monster): Aluminum prices which tumbled to 4.5 years low managed to stage smart recovery on London Metal Exchange. Earlier, disappointing economic data from the US and China had dragged the aluminum prices to $1,671.25 per ton. The elevated supply levels of aluminum also had added momentum to the drastic fall in prices.

However, in general, the base metals are expected to trend lower. The recently released quarterly report by the World Bank states that slowing growth in China may trigger negative attitude towards commodities in general. The report predicts that the metal prices will drop for a second successive year in 2014. The prices are predicted to drop another 1.7% in 2014, but all depends on the strength of Chinese economy.

According to Commerzbank, the physical premiums for aluminum still remain high. The US aluminum premiums in January rose to as high as $450 a ton, as per analyst estimates. The premium levels in Europe and Japan also reached record levels. Japan’s spot aluminum import premiums stayed at $300 to $320.

Aluminum along with copper, zinc and other metals witnessed strong bull run until 2011, aided by soaring Chinese demand. But since then they have fallen drastically mainly on oversupply concerns.

from metal.com