China’s A00 aluminium ingot price stands at a 3-month low, grappling with inventory restocking; Input costs stand steady

According to the Shanghai Metals Market survey, A00 aluminium ingot price initiated the week of July 22 with a downfall of RMB 60 per tonne to stand further below the RMB 19,500 per tonne level. Data shows the price has clocked at RMB 19,430 per tonne, marking the lowest in the past three months. On a week-on-week basis, the price edged a fall of 3.04 per cent from RMB 20,040 per tonne; while on a month-on-month calculation, it registered a decline of 4.10 per cent from RMB 20,260 per tonne.

The average prices are likely to range between RMB 19,410 per tonne and RMB 19,450 per tonne, with a spot contract to be traded at a discount price of RMB 90-50 per tonne.

Aluminium ingot price across regions

As the downfall today touched upon all the Chinese provinces, A00 aluminium ingot price in Linyi decreased by RMB 90 per tonne to RMB 19,450 per tonne, followed by a decline of RMB 70 per tonne in Chongqing to RMB 19,400 per tonne. In Gongyi, Wuxi, Hangzhou, and Tianjin, the domestic aluminium ingot price contracted by RMB 60 per tonne to settle at RMB 19,340 per tonne, RMB 19,420 per tonne, RMB 19,430 per tonne, and RMB 19,480 per tonne, respectively.

China’s domestic low-carbon aluminium price decreased by RMB 18 per tonne to peg at RMB 20,242 per tonne as of July 22, recording a week-on-week decline of 2.63 per tonne from RMB 20,788 per tonne.

The domestic high-purity aluminium price shed off RMB 100 per tonne, standing at RMB 26,800 per tonne, with average prices to hover around RMB 26,400-27,200 per tonne.

Analysis of extended price drop

China is witnessing a relentless decline in A00 aluminium ingot price over the past two weeks against the backdrop of muted demand among downstream consumers due to the traditional off-season and soaring growth of production with the resumption of smelters in the Yunnan province. This ongoing phenomenon has led to a chronic demand-supply gap, resulting in inventory growth close to 800,000 tonnes last week, a new high for H2 2024, up 243,000 tonnes over a year.

The decline in aluminium ingot price and increase in inventory started hand-in-hand since early July, and would most likely continue through the rest of July, with inventory fluctuation between 750,000 to 850,000 tonnes.

Primary aluminium raw materials

The Australian alumina FOB price dropped on Monday by US$1 per tonne to US$478 per tonne, reflecting a dip of US$2/t than a week ago and a slump of US$32 per tonne than a month earlier.

The domestic alumina spot price recorded no change after the growth of RMB 1 per tonne on July 19 to RMB 3,905 per tonne. Similarly, the domestic bauxite price remained restrained at RMB 640 per tonne on July 22, found the Shanghai Metals Market survey.

Among the overall steady primary aluminium input costs, aluminium powder price showed an exception by losing RMB 0.10 per kg on July 22 to stand at RMB 22.20 per kg, registering a fall of RMB 0.60 per kg since early July.