A00 ingot prices continue downward trend in China; analysts forecast demand-supply balance in the second half of 2018

A00 ingot prices in China are constantly falling after the winter cut started in November. Experiencing few significant drops since the last week of November, average A00 ingot price today stands at RMB 13,920/t. As updated by Shanghai Metals Market, the primary ingot price registered a drop of about RMB 400/t in the first week of December.  The price is expected to range within RMB 13,900 – 13,940 per tonne.

The drop in aluminium A00 Aluminum prices have continued in all other individual markets in China.  The below table shows the price drop in various markets:

Liu Xiaolei, chief aluminium analyst of SMM discussed these downward trends in the domestic aluminium market during the Die-casting Industry Chain Supply-demand Communication Summit organized by SMM on Dec.8.

The existing surplus market despite production cut remained the topic of highlight. The potential dropping cost of production for domestic aluminium companies after winter season is another topic that was being discussed in the forum.  The short-term recovery of ratio between SHFE and LME Aluminium is another trend that was taking the interest of the analysts.

The analysts however saw the possibility of a demand-supply balance in the second half of 2018 after the surplus supply at the end of 2017.

She is of the view that the main contract of domestic refined aluminium futures is estimated to move between RMB 13,500-17,500 per tonne; main range is RMB 14,500-16,500 per ton in the medium and long term. Spot price of domestic aluminium ingot is expected to move between RMB 14,000-16,500 per tonne. LME Aluminium is to move between $1,850-2,250 per tonne.