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19 JULY 2018 AL CIRCLE

Season lull in China results in aluminium billet inventory hike: alloys price remains unchanged

EDITED BY : DEBANJALI SENGUPTA 2MINS READ

Backed on narrow consumption by downstream consumers, inventories of 6063 aluminium billet in China have extended their growth across five major consumption areas. Over the weekend ended on Thursday, July 19, they have increased by 2,300 tonnes to reach at 70,800 tonnes, as shown by Shanghai Metals Market.

The inventory in Foshan and Guangdong is seen at the highest at 42,000 per tonne, while in Wuxi and Jiangsu, and Huzhou andZhejiang, the inventories are standing at 5,600 tonne and 7,600 tonne, respectively.

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The below chart indicates the status of China’s aluminium billet inventories in more details:

The price of aluminium alloys (ADC 12), on the other hand, has been showing a steady trend over the month at RMB 15,500 per tonne and registered no change since 3rd of July until now. But compared to the two previous months, the price records a month-on-month decline, attributed to poor downstream consumption.

However, aluminium alloy (A365) has recorded a slight growth today, on July 19, from RMB 14,600 per tonne to RMB 14,650 per tonne. Aluminium alloy (A380) is however, showing restraint at RMB 16,300 per tonne since July 3, 2018.

In the upstream segment, primary aluminium social inventory has also entered a weekly gain today, July 19, on weaker consumption compared to the deliveries arrived to the warehouses, according to SMM.

The inventory across eight major consumption areas, including SHFE warrants, increased by 22,000 tonnes from last Thursday to stand at 1.82 million tonnes.

The chart below shows the movements of inventories across Chinese markets in more details:

However, despite the rise in inventories, A00 aluminium ingot price did not shy away from showing a growth today. From RMB 13, 910 per tonne, as on 18th of July, the price climbed to RMB 13950 per tonne on July 19.


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EDITED BY : DEBANJALI SENGUPTA 2MINS READ

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