A00 aluminium ingot price shows temporary restraint; to be under pressure in short term due to sluggish demand

China aluminium prices continue downward trends with temporary signs of restraint. As updated by Shanghai Metals Market, today’s average A00 ingot price stands at RMB 13,720 per tonne and is expected to trade in a range of RMB 13700 – 13740 per tonne with a discount of RMB 90-50 per tonne. This registers a moderate gain from yesterday’s closing.  Prices will continue to face downward pressure in the short term unless there is support from downstream demand or inventories drop with more stocks moving to the market.  

Primary ingot prices registered slight gains ranging from RMB 5 to 45 per tonne across all domestic markets. Primary ingot prices remain the highest in South China market. Aluminium alloy prices also remain unchanged today after a period of steady fall.

On the cost side alumina prices remained unchanged today, after the huge price cut by Chalco. This was the first major drop in the price offered by the biggest alumina producer in China since December 2017. Imported alumina also remains unchanged after a significant drop yesterday. Current spot alumina prices in China range from US$ 430 to US$ 475.

Some Chinese aluminium producers that shut smelters during a winter crackdown on pollution may not reopen this spring once output curbs are lifted, as planned new capacity by state-run companies threatens to overwhelm demand and cut into profits. This is expected to keep the capacity in check in the near term and lift the prices. However, it is to be decided by how China boosts its demand and moves the stocks in the short and medium term.