A00 ingot prices drop in China driven by falling prebaked anode price and higher inventory

Despite the continuous struggle to move up, China aluminium prices continue to stay low with support of moving averages and driven by higher inventory.  Despite the official number stating that China’s aluminium production dropped in November YoY, the inventory continues to climb up. Independent analysts express reservations about official numbers, asserting that production totals show cuts have been far less severe than announced by Beijing.

After registering a slight increase yesterday, Average A00 ingot price drops today to stand at RMB 14,590 per tonne and expected to move within a range of RMB 14,570-14,610.  Spot discount is set to shrink to RMB 310-270/t. Aluminium ingot prices in all individual markets in China have registered a drop. According to SMM, SHFE aluminium is also set to drop and may test support at RMB 15,000 per tonne. SMM expects trading range at RMB 14,980-15,210 per tonne.

After a long gap of one month prebaked anode prices have registered another drop today to stand at RMB 4475/t from RMB 4550/t at East China market. The drop in prebaked anode price is driven by the ease of restrictions on coal imports by China. According to sources, China has quickened the customs clearing process dampening record high domestic prices for coal as cheaper foreign supply lands at ports. According to Reuters, prices of the most-active thermal coal futures have fallen more than 5 percent from a record high of 641 yuan ($98.77) per ton hit on Dec. 18.

Bauxite (4.5≤Al/Si＜5.5) price at Henan province drops to RMB 335 per tonne. Imported bauxite CIF China is up to USD 47.5 per tonne. Spot Alumina prices have registered no change in all major markets in China today and stand at RMB 2863/t. Chalco and imported alumina prices also remain unchanged.