China’s domestic and imported alumina prices reach a new high, driving A00 aluminium ingot price above the RMB19500/t level

According to the Shanghai Metals Markets survey, China’s average alumina spot price has heightened by RMB14 per tonne on Thursday, September 12, marking the third consecutive day of rise extending relentless growth since August 20. From August 20 to September 12, China’s average alumina price has rallied by RMB 50 per tonne, coming to a new high since more than two years.

Overview and analysis

In Henan and Shanxi, China’s domestic alumina price has surged by RMB 20 per tonne to RMB 3,955 per tonne and RMB 3,980 per tonne. The average prices are estimated to range between RMB 3,920-3,990 per tonne and RMB 3,940-4,020 per tonne, respectively. In Shandong, alumina price has increased by RMB 15 per tonne to RMB 3,950 per tonne, with average prices to hover around RMB 3,930-3,970 per tonne.

The Australian alumina FOB price has also recorded a sharp rise today following a restraint since August 21. The price has elevated by US$18 per tonne to reach US$539 per tonne, a new high in three years.

The exorbitant growth in both the domestic and imported alumina prices indicates the enormous demand for the ore, which is in line with the rising primary aluminium production, while also depicting supply constraints in the market, which is why consumers are ready to pay high prices.

The supply constraint of alumina in the market is primarily due to limited production because of restricted bauxite supply, which in turn, has led to a steady bauxite price at RMB 640 per tonne since July 3.

A00 aluminium ingot price

In tandem with the growing alumina price, China’s A00 aluminium ingot price has accumulated RMB 250 per tonne overnight to close at RMB 19,590 per tonne officially. On a week-on-week basis, the price has marked an increase of RMB 290 per tonne from RMB 19,300 per tonne. The average prices are expected to range between RMB 19,570 per tonne and RMB 19,610 per tonne, with the spot contract to be traded at a discount price of RMB 10 per tonne to a premium price of RMB 30 per tonne.

China’s domestic low-carbon aluminium price has risen by RMB 247 per tonne, settling at RMB 20,433 per tonne. The prices for high-purity aluminium (99.99% and 99.996%) have also jumped by RMB 200 per tonne to officiate at RMB 26,600 per tonne and RMB 27,600 per tonne, respectively.

Region-wise analysis

Today, aluminium prices have increased across eight major provinces in China. In Foshan and Hangzhou, the price has surged by RMB 250 per tonne to RMB 19,500 per tonne and RMB 19,590 per tonne, followed by the increase of RMB 240 per tonne in Wuxi and Chongqing to stand at RMB 19,580 per tonne and RMB 19,560 per tonne. In Gongyi and Tianjin, the average price is up by RMB 220 per tonne and RMB 170 per tonne to peg at RMB 19,620 per tonne and RMB 19,560 per tonne, while the price in Shenyang and Linyi has grown by RMB 200 per tonne to reach RMB 19,540 per tonne and RMB 19,590 per tonne.

Aluminium alloy prices

The prices of aluminium alloys also significantly increased on September 12, as aluminium alloy (A356) and (A360) demonstrated price surges of RMB 250 per tonne to RMB 20,050 per tonne and RMB 20,300 per tonne, respectively. Aluminium alloys (ADC12) price and aluminium alloy (A380) price have increased by RMB 100 per tonne to RMB 20,200 per tonne and RMB 21,200 per tonne, respectively.

Market analysis

The price hike in aluminium ingot and alumina is basically driven by optimism around potential U.S Fed rate cuts, which control the market sentiment coupled with declining inventories and increased demand.

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