Aluminium prices expected to remain under pressure in 2024, analysts warn

Aluminium prices have not shown any improvement, as expected, during the beginning of the year compared to 2023. Analysts from AL Circle have already stated the global aluminium market in H1 2024 is anticipated to mirror 2023.

This is primarily due to a slowdown within the Chinese economy, notably within the troubled property and construction industries and the economic deceleration in the world's large economies.

Analysts foresee a persistent surplus of the metal throughout 2024, like in 2023 at the end, which was around 800,000 tonnes. It is anticipated that sustained downward pressure on prices will be exerted, given the prevailing weakness in demand.

The research arm of Kenanga Investment Bank stated, "We acknowledged that contrary to expectations, China’s reopening has not significantly boosted the demand for aluminium.

"While the Chinese government has introduced various measures to stabilise the property market, a meaningful recovery is still not quite on the horizon."

The research firm highlighted an uptick in demand for aluminium in China's solar sector, electric vehicles (EVs), and transmission infrastructure.

It also emphasised that stricter green regulations, particularly in China, may permanently close smelters operating on fossil fuel, further tightening the global aluminium supply.

 Furthermore, Western nations are expected to persist in avoiding Russian aluminium, which constitutes approximately 6 per cent of global aluminium production.

AL Circle research has also revealed that the renewable energy sector will be a new entry in the top demand drivers list for aluminium (Solar & Wind Turbines).