China’s aluminium inventory registers a hike, while A00 aluminium ingot price falls

After a successive decline of aluminium refined inventory over the last couple of weeks, SMM updated on April 4, 2018, including SHFE warrants that it hovered at 2.231 million tonnes. Although the inventory went down from 2.243 million tonnes seen in the last week, it was slightly up from 2.227 million tonnes recorded in the early week Monday April 2, 2017.

This hike after a continual fall over the past weeks might be due to tight aluminium supply in the domestic market because of China’s 25 per cent tariffs on sourced aluminium scraps from the US, resulting in a lesser secondary aluminium production in the market and forbidding downstream consumers from stocking.

The above chart demonstrates the overall transactions in some of the major China markets, where there has been a slight rise in Wuxi and Jiangsu to 901,000 tonnes from the early week, Shanghai 446,000 tonnes, Nanhai and Guangdong 425,000 tonnes, Tianjin 53,000 tonnes. The other markets have either remained unchanged or decreased from the earlier.

On the face of the refined aluminium inventory hike, average A00 aluminium ingot prices decreased from RMB 13980 per tonne to RMB 13960 per tonne, as on April 4, 2018. The prices are expected to range between RMB 13940 and RMB 13980 per tonne with spot discounts to settle at RMB 60 to RMB 20 per tonne.

Other raw material prices like alumina and bauxite remain unchanged, at average RMB 2718 per tonne and RMB 400 per tonne respectively.