Aluminium prices jump 10.7% Y-o-Y: China's trade policy drives market shift

The primary and secondary aluminium ingot pricing in the Shanghai Metals Market is on a high-jumping spree as the week progresses towards closing. The average price of a00 aluminium ingot on Thursday, December 05, was listed as RMB 20,550 per tonne, within a limited range of RMB 20,530-20,570 per tonne, up by 190 RMB to the prior day's pricing. The pricing of a00 primary metal was RMB 18560 per tonne on December 05 2023, indicating a 10.7 per cent price gain Y-o-Y.

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Aluminium ingot price hike and the reason behind

The recent announcement by China's Ministry of Finance to terminate export tax rebates for aluminium and Copper, effective December 1, is expected to have a profound impact on global metal markets. This policy shift, which is likely to artificially constrain supply and drive up international prices, could significantly alter the global metal trading landscape. The decision, which effectively increases the cost of Chinese metal exports, has the potential to make them less competitive while protecting domestic manufacturers. By removing tax incentives, China is strategically repositioning itself in the global metals trading ecosystem, a move that will force international buyers to reconsider their sourcing strategies and seek alternative suppliers in other emerging markets.

The spot contract, set to be traded on December 5, is expected to maintain steady pricing, with a premium of RMB 0-40 and an average of RMB 20 per tonne.

The average A00 aluminium ingot pricing increased further in most of the provinces, with prices depicted as RMB 20,420 per tonne (+170) in Gongyi, RMB 20,530 per tonne (+180) in Foshan, RMB 20,540 per tonne (+160) in Wuxi, RMB 20,570 per tonne (+160) in Hangzhou, and RMB 20,530 per tonne (+190) in Chongqing. The a00 aluminium ingot pricing in the provinces of Shenyang, Tianjin and Linyi also heightened this time on a similar ratio and stood at RMB 20,500 per tonne (+160), RMB 20,500 per tonne (+140), and RMB 20,470 per tonne (+160), respectively.

The aluminium alloy ingot variant ADC12 saw no price change for the past nine days. Variant A356 settled at RMB 21,000 per tonne (+150), while aluminium alloy - A360 escalated to RMB 21,150 per tonne (+200) on Thursday.

The high-purity aluminium ingot prices of 99.99 per cent and 99.96 per cent variants are RMB 27,600 per tonne (range RMB 27,200-28,000 per tonne) and RMB 28,600 per tonne (range RMB 28,200-29,000 per tonne) with a 200 bucks gain to yesterday's price. As for the low-carbon aluminium ingot, the price listed on SMM showed RMB 21,577 per tonne (+179).

Alumina price progresses at a slower pace

On Thursday, December 5, as the first week of the month comes near its conclusion, the average price of alumina rose by RMB 8 per tonne and stood at RMB 5,747 per tonne.

In contrast, prices in provinces like Henan, Guizhou, Lianyungang, and Bayuquan remained unchanged from the previous day's closing price. The provincial prices of alumina in Shandong, Shanxi and Guangxi have gained another RMB 10 per tonne each to the prior pricing and were listed as RMB 5,710 per tonne, RMB 5,820 per tonne, and RMB 5,680 per tonne, respectively.