China’s aluminium ingot price declines by RMB110/t without affecting positive W-o-W movement

As of July 5, China’s domestic A00 aluminium ingot price concluded the week at RMB 20,270 per tonne, with average prices hovering around RMB 20,250 to 20,290 per tonne, found the Shanghai Metals Market survey. Compared to the previous day, the price descended by RMB 110 per tonne but still stood 0.60 per cent higher week-on-week.

Throughout the week until July 4, the ingot price subsequently shot up by RMB 270 per tonne, starting at RMB 20,110 per tonne and reaching RMB 20,380 per tonne. At the end of the week, it decreased but did not affect the positive weekly trend. Today, the spot contract is likely to be traded at a discount price of RMB 70-30 per tonne, with an average of RMB 50 per tonne.

Region-wise analysis:

The price of A00 aluminium ingot dwindled across all the regions of China, with Gongyi seeing the highest fall of RMB 130 per tonne to RMB 20,130 per tonne. In Wuxi and Hangzhou, the ingot price dwindled by RMB 110 per tonne to stand at RMB 20,270 per tonne, followed by a decline of RMB 90 per tonne in Chongqing to RMB 20,190 per tonne. In Shenyang and Linyi, A00 aluminium ingot price fell by RMB 80 per tonne to RMB 20,220 per tonne and RMB 20,270 per tonne, while the price in Tianjin dropped by RMB 60 per tonne to RMB 20,320 per tonne, as of July 5.

On the same day, the domestic low-carbon aluminium price diminished by RMB 110 per tonne, reaching RMB 21,004 per tonne. The high-purity aluminium price slipped by RMB 100 per tonne to RMB 27,700 per tonne, with average price ranging between RMB 27,300-28,100 per tonne.

Raw material prices:

China’s aluminium powder price inched down by RMB 0.10 per kg on July 5 to peg at RMB 23 per kg, following the three consecutive days of rise from RMB 22.8 per kg to RMB 23.1 per kg. The average prices today are estimated to range between RMB 22.9-23.1 per kg.

Among other input costs, the Australian alumina FOB price suffered a loss of US$ 3 per tonne to close the week at US$ 502 per tonne.

Aluminium alloy prices:

Aluminium alloy prices also decreased across China in line with A00 aluminium ingot price fall. On July 5, aluminium alloy (A360) price recorded a fall of RMB 150 per tonne to clock at RMB 21,050 per tonne, while the aluminium alloy (A356) price decreased by RMB 100 per tonne to stand at RMB 20,750 per tonne.

The prices of aluminium alloys (ADC12) and aluminium alloy (A380), on the other hand, shrank by RMB 50 per tonne to RMB 20,000 per tonne and RMB 21,000 per tonne, respectively.

Market analysis:

In summary, the volatility in China’s aluminium market, as reflected by the recent price fluctuations, is driven by a complex interplay of global demand-supply dynamics, regional disparities, stable raw material costs, economic policies, renewable energy investments, and market speculation.