According to the Shanghai Metal Market (SMM) survey, China’s A00 aluminium ingot price has shed off RMB 190 per tonne from the previous day to reach the three-month low. As per the data, the domestic price has come in at RMB 19,570 per tonne, which is significantly down by RMB 570 per tonne week-on-week, attributed to the ongoing traditional off-season in the manufacturing sector, leading to weaker demand from downstream industries. In this backdrop, the increase in aluminium production, resulting in oversupply in the market, is adding up a cause for receded prices.
The average prices are expected to range between RMB 19,550-19,590 per tonne, with the spot contract estimated to be traded at a discount price of RMB 70-30 per tonne.
Region-wise price analysis
The domestic price of aluminium ingot has shrunk across all the major Chinese provinces, with the highest fall in Gongyi of RMB 200 per tonne to RMB 19,480 per tonne. In Wuxi, Hangzhou, Tianjin, and Linyi, the price has dwindled by RMB 190 per tonne to settle at RMB 19,560 per tonne, RMB 19,570 per tonne, RMB 19,620 per tonne, and RMB 19,620 per tonne, respectively. In Chongqing and Shenyang, the price slumped by 160 per tonne and RMB 170 per tonne, standing at RMB 19,570 per tonne.
Raw material prices
The imported bauxite price has seen a very marginal increase of US$ 0.01 per tonne to stand at US$75.01 per tonne as of July 18. However, the average domestic bauxite price has remained unchanged at RMB 640 per tonne.
The domestic average alumina price has also recorded no change from RMB 3,904 per tonne, whereas the imported alumina price has dipped by US$1 per tonne to US$479 per tonne.
Aluminium alloy prices
The average aluminium alloys (ADC12) price has experienced a decline of RMB 100 per tonne to RMB 19,700 per tonne, with average prices to range between RMB 19,600 per tonne and RMB 19,800 per tonne.
Aluminium alloy (A380) price has also recorded a fall of RMB 100 per tonne to RMB 20,700 per tonne, with average prices to hover around RMB 20,600-20,800 per tonne. Aluminium alloy (A356) price has witnessed the highest fall than the rest of the alloy grades by about RMB 200 per tonne to RMB 20,000 per tonne. The average prices are estimated to range between RMB 19,800 per tonne and RMB 20,200 per tonne.
Market analysis
China’s primary aluminium production peaked in the past two months, resulting in an oversupply in the market. In return, the surplus in the market is exerting downward pressure on prices as producers and sellers attempt to clear excess stock. Analysts have also noted that although there is a slight recovery in China’s domestic aluminium ingot price Y-o-Y, it is unlikely to continue further due to the persistent weaker demand from the downstream industries
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