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16 MARCH 2018 AL CIRCLE

Aluminium prices struggle to stay rangebound in China with no strong market fundamentals and drop in input cost

EDITED BY : BEETHIKA BISWAS 2MINS READ

China's winter heating season ended on Thursday February 15 with less than expected results. China's aluminium production fell 1.8 per cent in January-February from a year earlier, as the country's pollution crackdown and supply-side reform kicked in. However, an estimated 4.4 million tonnes of new capacity are expected to be online in 2018. Stocks of aluminium have grown noticeably in last two months creating fears of subdued demand and a supply glut. Though downstream demands are expected to pick in April, the market is still sluggish with no sign of price improvement. Input costs have also dropped considerably in recent times.

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Amidst the tension of trade war and climbing capacity, domestic aluminium ingot prices are hovering at the lowest since 2016. Average A00 Aluminum Ingot prices remain unchanged at RMB 13,740 per tonne today.  The prices are expected to range within RMB 13,720 to RMB 13,760 per tonne and spot discounts are expected to settle at RMB 160 to 120 per tonne or about RMB 140.  Discounts are widening at the fear of an oversupplied market.  

Primary ingot prices registered no change across all domestic markets.  On the cost front alumina and bauxite prices remain unchanged after some significant drops.  Aluminium alloy prices have remained flat owing to the absence of strong buying trend from downstream producers.


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EDITED BY : BEETHIKA BISWAS 2MINS READ

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