In the wake of a fuel depot blast in Guinea, a fear of bauxite supply shortage has stirred the Chinese upstream aluminium market, provoking smelters to buy alumina in anticipation of a production cut. As a result, the domestic alumina spot price in China has been on a rising spree since December 18, a day after the incident in Guinea occurred.
Alumina price reaches its Y-T-D peak:
In a little more than a week, the price of Chinese alumina has soared by RMB 48 per tonne. According to the Shanghai Metals Market survey, on December 27, the price increased by RMB 18 per tonne, the highest growth rate in this period, to reach RMB 3,044 per tonne, marking the highest year-to-date and standing 4 per cent higher than RMB 2,927 per tonne during the corresponding period of the previous year.
In Shandong, Henan, Shanxi, and Guangxi, alumina price has surged by RMB 20 per tonne to come in at RMB 2,990 per tonne, RMB 3,060 per tonne, RMB 3,065 per tonne, and RMB 3,045 per tonne, respectively. In Guizhou, the price has elevated by RMB 15 per tonne to settle at RMB 3,050 per tonne, found SMM.
Factors driving the A00 aluminium ingot price growth
As a consequence of the alumina price hike, China’s A00 aluminium ingot price is also encountering continued growth, reaching RMB 19,280 per tonne. That indicates the price has grown by RMB 80 per tonne on Wednesday, December 27. The average prices are expected to range between RMB 19,260 per tonne and RMB 19,300 per tonne, with a spot contract to be traded at a discount price of RMB 40 per tonne and a premium price of RMB 0 per tonne.
Since December 12, China’s domestic A00 aluminium ingot price has skyrocketed by RMB 900 per tonne from RMB 18,380 per tonne.
Besides the alumina price rise, another factor driving primary aluminium price growth is the electricity price surge due to the dry season. This dual factor is increasing the primary aluminium production cost, due to which the producers are expanding their selling prices.
Aluminium alloy prices
Aluminium alloy prices in China also witnessed a rise on December 27. Except for aluminium alloys (ADC12) price, which has remained restrained at RMB 20,100 per tonne, aluminium alloy (A356) and aluminium alloy (A360) prices have escalated by RMB 100 per tonne to stand at RMB 19,950 per tonne and RMB 20,200 per tonne.
While the average prices of aluminium alloy (A356) are likely to range between RMB 19,800-20,100 per tonne, the average prices of aluminium alloy (A360) are estimated to hover around RMB 20,100-20,300 per tonne.
Responses
