
After the two days of holiday for Qingming Festival in China on Thursday April 5 and Friday April 6, the aluminium market shows an overall positive sentiment. Aluminium traders, manufacturers and investors get a reason to rejoice as both aluminium inventory and output declined.
According to the Shanghai Metal Market data on Sunday April 8, China’s refined aluminium inventory including SHFE warrants plunged and returned to 2.227 million tonnes as downstream producers boosted their stock piles. This brings back an optimistic revision in aluminium inventory after a hike on April 4, 2018 from 2.27 million tonnes to 2.231 million tonnes.
{alcircleadd}The current inventory status in major Chinese cities is as follows:

Another update from SMM shows a fall in Aluminium output as well, which is down by 2.7 per cent year-on-year in March, with a total aluminium production of 3.03 million tonnes.
In the first quarter of the financial year 2017-18, the total output was down by 2.5 per cent, totalling 8.76 million tonnes, as compared to the corresponding period of the previous financial year. The cause of this decline attributes to the slower commissioning of new capacity as a consequence of lower aluminium prices and profit losses.
The decline of both aluminium inventory and aluminium output shows that there is a balance forming between consumption and production in the aluminium market in China.

The above chart shows the average price rise of A00 aluminium ingot over 3 months time in China.
Moreover, the average price rise of A00 aluminium ingot has added a further boost to the China market. After a fall from RMB 13980 per tonne to RMB 13960 per tonne on April 4, 2018, average A00 aluminium ingot prices jumped to 14080 on April 9, 2018. The prices are expected to range between RMB 14060 and RMB 14100 per tonne with spot discounts to settle at RMB 80 to RMB 40 per tonne.
In addition, input costs including alumina and bauxite show a stable range. Although both the raw materials prices remain unchanged from March 29 and March 26, 2018 respectively yet show an overall steadiness with no further fluctuations.
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