China’s A00 aluminium price sees a growth of RMB50/t after a week-long downfall for low demand and high production

The latest Shanghai Metals Market (SMM) data reveals a mixed scenario in the aluminium market with today’s price for A00 aluminium ingot showing a slight rise of RMB 50 per tonne to RMB 20,400 per tonnes. The average prices are estimated to range between RMB 20,380 per tonne and RMB 20,420 per tonne, with spot contract to be traded at a discount price of RMB 60-20 per tonne.

However, a broader analysis over the past month and even weekly trend indicates a continuing downward track in prices. One of the primary reasons for the decline in aluminium prices is the weak purchase sentiment across China due to a traditional off-season and a massive 2-year hike in primary aluminium production to approximately 3.65 million tonnes.

As of June 19, 2024, A00 aluminium ingot price has also increased in many Chinese regions like Gong Yi, Foshan, Wu Xi, Hang Zhou, Chon Qing and Lin Yi. In Foshan, Hangzhou, Chongqing, and Linyi, A00 aluminium ingot price has gained RMB 50 per tonne to amount to RMB 20,210 per tonne, RMB 20,400 per tonne, RMB 20,310 per tonne, and RMB 20,450 per tonne, respectively. In Gongyi and Wuxi, the price has climbed up by RMB 30 per tonne to RM 20,310 per tonne and RMB 20,380 per tonne.

Shenyang has been an exception, losing RMB 20 per tonne June 19 to stand at RMB 20,350 per tonne.

The domestic low-carbon aluminium price has elevated by RMB 50 per tonne on June 19 to come in at RMB 21,195 per tonne.

Input costs

On June 19, the average alumina spot price has dropped by RMB 2 per tonne to stand at RMB 3,903 per tonne. While the price has remained mostly muted across Chinese provinces, only Henan has recorded a fall to RMB 3,880 per tonne versus RMB 3,890 per tonne on June 18.

The Australian alumina FOB price has also registered no change on Wednesday, June 19, to stand at US$510 per tonne.

Aluminium alloy prices

Aluminium alloy (A356) price and aluminium alloy (A360) price have increased by RMB 50 per tonne aligned with A00 aluminium ingot price. With the latest increase, aluminium alloy (A356) price has come in at RMB 20,900 per tonne and aluminium alloy (A360) price has settled at RMB 21,200 per tonne.

Market analysis:

Last week, China’s A00 aluminium ingot price was largely influenced by low demand due to a traditional off-season for the manufacturing sectors. An increase in production, driven by operation resumptions in Yunnan province, was also a contributing factor to the price drop against the backdrop of weaker purchasing sentiments