Low demand and import tariffs result in a chronic M-o-M loss of China's A00 Aluminium ingot price

On July 17, 2024, A00 aluminium ingot price in China has experienced a minor decrease of RMB 30 per tonne after a huge downfall on the previous day of RMB 260 per tonne. With the latest fall, the domestic aluminium ingot price has shrunk below RMB 20,000 per tonne, settling at RMB 19,760 per tonne, according to the Shanghai Metals Market survey.  This results in the sharp month-on-month decline of RMB 620 per tonne from RMB 20,380 per tonne.

Today, the average prices are estimated to hover around RMB 19,740-19,780 per tonne, with the spot contract likely to be executed at a discount price ranging from RMB 60-20 per tonne.

SMM predicts the price of A00 aluminium ingot will stay low due to a surge in domestic production, which is expected to exceed current demand until it catches up. Additionally, tariffs on China's aluminium have reduced global consumption, preventing significant price growth.

Region-wise analysis

The price of aluminium ingot reduces across all the Chinese provinces. Only in the Foshan region has there been no change in the price, remaining at RMB 19,600 per tonne. The price has dropped in Wuxi, Chong Quing, Tian Jin, and Lin Yi regions by RMB 30 per tonne, settling at RMB 19,750, 19,730, 19,810 and 19,810 per tonne, respectively. In Hang Zhou region, the price has slumped by RMB 50 per tonne to stand at RMB 19,760 per tonne, while the price in Shen Yang and Gong Yi is down by RMB 20 per tonne, averaging at RMB 19,740 and 19,680 per tonne.

However, the price of low-carbon aluminium is up by RMB 6 per tonne, standing at RMB 20,511 per tonne on July 17.

Raw material prices

The prices of raw materials like bauxite and alumina have remained steady across China despite fluctuations in global markets. In regions such as Shanxi and Henan, bauxite prices have held firm at RMB 640 and 550 per tonne, respectively, for fifteen consecutive days. This stability is due to consistent local production and effective government policies.

The average alumina spot price is continuing at RMB 3,904 per tonne, following an increase of RMB 1 per tonne on July 12.

Aluminium alloy ingot prices

The prices of aluminium alloys have also remained the same, except for aluminium alloy (A356) and aluminium alloy (A360) prices. They have both declined by RMB 50 per tonne to settle at RMB 20,200 and 20,550 per tonne, respectively, with expected average prices at RMB 20,000-20,400 per tonne and RMB 20,450-20,650 per tonne.