China central bank’s monetary policy boosts A00 aluminium ingot price by RMB100/t and rescues from W-o-W fall

On July 2, 2024, China’s A00 aluminium ingot price has witnessed a modest growth after two previous consecutive days of downfall, found the Shanghai Metals Market (SMM) survey. According to SMM, the price has increased by RMB 100 per tonne to reach RMB 20,210 per tonne, driven by China's central bank’s supportive monetary policy stance aimed at economic stability.

Noticeably, the policy has rescued the domestic aluminium ingot price, bringing it higher than a week ago compared to RMB 20,200 per tonne. But compared to the price a month ago, it is down by 4.17 per cent from RMB 21,090 per tonne.

Today, the average prices of A00 aluminium ingot are likely to range between RMB 20,190 per tonne and RMB 20,230 per tonne, with spot contract to be traded at a discount price of RMB 90-50 per tonne.

Region-wise price changes

On July 2, A00 aluminium ingot has increased across all the major regions of China, mostly by RMB 100 per tonne in Foshan, Wuxi, Chongqing, Shenyang, Tianjin and Linyi. With the latest hike, the ingot in Chongqing and Shenyang has come in at RMB 20,160 per tonne, while the price in Foshan, Wuxi, Tianjin, and Linyi has arrived at RMB 20,040 per tonne, RMB 20,210 per tonne, RMB 20,160 per tonne, and RMB 20,230 per tonne, respectively.

In case of Gongyi and Hangzhou, the price has escalated by RMB 120 and RMB 110 per tonne to stand at RMB 20,110 per tonne and RMB 20,210 per tonne, respectively.

In contrast, China’s domestic low-carbon aluminium price has seen a price dip of RMB 28 per tonne to close at RMB 20,898 per tonne. However, the high-purity aluminium (99.99%) price has hiked by RMB 100 per tonne to RMB 27,600 per tonne, with average prices to hover around RMB 27,200-28,000 per tonne.

Raw material costs

Among the primary aluminium input prices, China’s domestic bauxite price (6.0≤Al/Si＜7.0) in Shanxi and Henan has gained RMB 10 per tonne to reach RMB 640 per tonne and RMB 635 per tonne, respectively.

The imported bauxite price has seen no change, with an average of US$73.59 per tonne.

The average alumina spot price has also remained muted at RMB 2,512 per tonne over the past nine days.

Aluminium alloy prices

Aluminium alloy (A356) and aluminium alloy (A360) prices have expanded by RMB 100 per tonne on July 2 to settle at RMB 20,650 per tonne and RMB 21,000 per tonne, with average prices ranging between RMB 20,500-20,800 per tonne and RMB 20,900-21,100 per tonne, respectively.

However, aluminium alloys (ADC12) price and aluminium alloy (A380) price have continued to remain muted at RMB 19,950 per tonne and RMB 20,950 per tonne.

Market analysis

Today’s upward movement of China’s domestic A00 aluminium ingot is solely due to central bank’s supportive monetary measures like maintaining its key lending rates unchanged for monetary easing amid narrowing interest rate margins and a weakening currency.