Alumina and aluminium prices performed mixed over the week; dropping alumina prices likely to weigh on aluminium prices

A00 aluminium ingot price started the month of July lower at RMB13760 per tonne and continued to move in a lower range till Wednesday, July 3. The price registered a hike in the last two days of the week at RMB 13760 per tonne and RMB13810 per tonne on Thursday and Friday. Aluminium price in other major China markets saw mixed performance over the week.

Shanghai Metals Market study showed that a low consumption season in July-August and falling alumina prices would continue to weigh on Shanghai aluminium prices in the short term.

The average premium came in at RMB10 per tonne on Thursday, June 4. As of yesterday, spot aluminium price is likely to trade at a discount of RMB 10 per tonne to a premium of RMB 30 per tonne.

On the other hand, social inventories of primary aluminium across eight major consumption areas in China, including SHFE warrants, extended their downfalls over the week ended on July 4. Primary aluminium stocks were 1.041 million tonnes as of Monday July 1, down 10,000 tonnes from Thursday June 27. Inventories again dropped by 23,000 tonnes to stand at 1.028 million tonnes as of July 4.

As far as raw material is concerned, the average spot price of alumina continued to remain on downward track throughout the week. Alumina price started the week with a decline of RMB 55 per tonne to RMB 2786 per tonne. Average alumina ended on a negative note and tumbled RMB 15 per tonne to RMB 2723 per tonne.

Shandong Weiqiao Group lowered its purchasing prices of prebaked anode for July 2019. The benchmark purchasing prices for prebaked anode stood at RMB 3,045 per tonne in cash, down RMB 50 per tonne from June.

To conclude this, potential production cuts at alumina refineries are likely to buoy the raw material’s price but as of now capacity cuts have not lifted prices significantly. There would be no significant upward movement in alumina price next week.