Aluminium alloy prices up across China;, downstream players under impact of environmental check

In china, supply of aluminium continues shrinking due to the strict reforms. Chinese aluminium industry is bent on seeing a blue sky over Shanghai and all other provinces during this winter.  The inventories are declining and effect of production reduction is slowly taking shape. SHFE Base Metals mostly opened high yesterday and retraced during noon. In the afternoon most of the metals kept volatile. All base metals including aluminium dropped during closure.

Average Prices of A00 aluminium ingot have registered a rise from RMB 16,210/t to stand at RMB 16,270/t today October 26.  A00 aluminium ingot prices across all individual markets have also increased consequently. South China market has registered the highest rise at RMB 95/t. Aluminum Alloy (ADC12) prices also have registered a rise across all major markets. The major upward changes in the Aluminum Alloy (ADC12) prices are shown in the table below:

The market dynamics has changed, with SHFE Aluminium rising from bottom level to a considerable bullish level. On the consumption side, purchasing is still low because of higher prices. Though demand is expected to rise in the long run, currently, the downstream market is slow in buying due to supply restrictions.

In another update from Shanghai metals Market, environmental inspection is now showing its impact in the downstream sectors in the provinces.  When the No.1 environmental inspection team of Henan Province moved into Zhengzhou on Ocrt.13th, the major influence was seen on the local downstream enterprises.  They have inspected many colour coating plants among aluminium industrial chain. According to SMM many colour coating plants in Gongyi and its nearby areas have been shut down or asked to limit production due to environmental backlogs. However, as the demand for colour coated products is not big, it is not expected to affect consumption of primary aluminium directly.