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Aluminium Price Trend and Forecast
Get the latest insights on price movement and trend analysis of Aluminium in different regions across the world (Asia, Europe, North America, Latin America, and the Middle East & Africa).
Aluminium Price Trend for the First Half of 2023
The Asian Aluminium market exhibited mixed price trend in the first half of 2023. From January to February, prices rose marginally because steady demands from downstream manufacturing sectors supported cost. But in the next month, prices started sliding majorly because the USA imposed a 200% tariff on Russian aluminium imports, which is the second biggest producer of Aluminium in March 2023. This diverted Russian supplies from America to its friendly Asian nations, which reduced upstream cost support, aiding declining trend.
The only jump in the price trend came at the change of quarter because of a sudden influx of international orders because of US tariffs, but soon the oversupply took over, and prices started declining again after April. Aluminium prices started in January at an average of about 2705 USD/MT (Contract FD) in the Chinese domestic market and ended quarter 2 with an average of around 2610 USD/MT (Contract FD) on June 23’. Indian Aluminium market too exhibited similar trend in the said period, with prices averaging at around 2512 USD/MT (Contract FD) in June’23.
European Aluminium prices also exhibited mixed patterns. Quarter one had a slow start because suppliers made conscious purchases amidst ambiguity around Aluminium prices. Also, struggles with inflation and high energy prices rendered severe cost of living crisis. Germany even underwent an economic recession in February 2023. These events impacted European consumers’ purchasing capacities and behaviour, making it more necessity centric. So, because of dipped downstream demands, price trend for Aluminium remained dull and drowned in quarter one.
But as the second quarter approached, US tariffs on Russian imports created scarcity in Western markets. Moreover, because of some economic rebound, markets started thawing a little, which increased downstream demands, and existing inventories were already limited because of conscious purchases by suppliers and could not support the rising demands. So, the prices were set on an inclined trajectory for most of Quarter 2.
The North American Aluminium market almost replicated the European market for price trend. Quarter one started with saturated inventories as economic setbacks from the collapse of 2 major US banks and increased interest rates negatively impacted the purchasing activities and abbreviated the downstream demands. So, the prices laid low for most of the first quarter.
As the second quarter approached effects of America’s 200% tariff imposition on Russian Aluminium imports started showing an impact. Upstream costs rose as inventories started depleting, catering to the growing demands from downstream manufacturing and construction sectors. So, the Aluminium prices mostly dwelled on the higher side for the majority of the second quarter.
According to the Procurement Resource, the price trend for Aluminium are expected to continue in the same mixed patterns. The market will be influenced by upstream costs and downstream demands, with demands continuing as the primary driving factor.
Aluminium Price Trend for the Second Half of 2022
With the dollar strengthening and the interest rates hike by the central bank the feeling of economic recession dominated the market’s sentiments and as a result, the bulk commodities plunged. The price trend of aluminium fell during the said period showing a slight increment from time to time. Though the production costs stabilized during the third quarter, the overall prices remained weak owing to muted demand from downstream sectors. The prices of aluminium ingots averaged 18453.33 RMB/MT towards the end of the third quarter.
The Chinese government had imposed restrictions on heavy industries with a plan to reduce carbon emissions, which had an impact on aluminium prices. Incessant power shortages in the country also disturbed the supply chain of the commodity this year. Aluminium prices stabilized a bit during the fourth quarter for a short term, however, overall prices kept weak averaging 18716.67 RMB/MT towards the end of December’22.
The European region faced the direct consequences of the Russia-Ukraine conflict triggering an acute energy crisis. With the high-cost inflation and high operating rates, the manufacturers passed on the higher prices to the consumers to cushion their profits resulting in demand destruction. The lowered demand caused the European manufacturers to seek to offload expensive metal leaving limited buffer stock only. Hence, the price trend for aluminium dwindled in the European domestic market.
The aluminium prices in the US domestic market were in line with the global outlook. The prices fell owing to weak demand from the construction and electrical sectors amid high sourcing and operating costs.
Due to surging inflations, central banks hiked the interest rates worldwide, controlling the purchasing power and thereby limiting demand. However, going forward the aluminium price trend are expected to strengthen as demand rebounds slowly from the turmoil seen last year.
For the Second Quarter of 2022
In China, Aluminium prices reached a six-month low owing to the stringent covid lockdown restrictions amidst the rising cases. The fear in the market because of uncertainty and low running capacities of the industries caused the prices to fall in the domestic market.
However, after relaxing the restrictions, the industries started churning the metal at enhanced capacities, which led to stockpiling in the market because of the muted demands in downstream sectors. Hence, the price trend crashed further, averaging around 2685 USD/MT on the domestic front.
The production of primary Aluminium is a highly energy intensive process. The European industrial sector is already facing an acute energy crisis due to the ongoing confrontation. The high production costs, complex supply, and increased demand from the automotive industry caused the Aluminium price increase in the region.
With sanctions against Russia, the European governments are frantically working to meet the domestic demands. During this forecast quarter, the prices averaged 2950 USD/MT on London Metal Exchange.
The price trend were in line with its Asian counterpart due to the muted demand and higher production levels. The price of Aluminium averaged 2400 USD/MT (approx.) in the United States.
For the First Quarter of 2022
In March 2022, in China, per ton price of Aluminium was 22640 RMB/MT. Secondary or recycled Aluminium makes for a sizable portion of worldwide Aluminium usage. Due to its cost-effectiveness, scrap from automobiles, equipment, beverage cans, and machinery was recycled and reused.
Reprocessing secondary metal or trash uses a fraction of the energy necessary to produce new metal from mining, resulting in less environmental damage. In addition, measures such as the creation of automobile disassembly and shredding factories, as well as depollution centres, aided market expansion. Furthermore, widespread usage of the metal in the transportation industry was boosted the Aluminium demand even further.
Since the beginning of 2022, European aluminium prices have risen by roughly 15%, surpassing its historic high of October 2021 - an increase of more than 60% compared to January 2021. Because energy accounts for a large share of production costs, more than a third, a fast increase in the price of gas has a significant influence on company profitability, particularly in Europe, where natural gas prices have climbed by about 550% from December 2020 to December 2021.
As a result, European aluminium manufacturers are forced to make a difficult decision. Either they shut down their smelters or they cut back on production, even if it means losing money. This is the option selected by Europe's largest smelter at the end of December 2021. Aluminium prices on LME were 3300 USD/MT in January 2022.
For the Fourth Quarter of 2021
China had begun to reduce its Aluminium production in 2021 and instead chose to import large volumes which not only created a global shortage of the metal but also increased the prices for the commodity. In November 2021, an Aluminium factory in Yunnan, China suffered a major explosion. This led to a complete halt to production in the region, reducing the production capacity by 300,000 tonnes which impacted the already suffering market supply.
In most European countries, the energy prices had been increasing significantly in the last quarter of 2021 making the metal’s production highly expensive in the region. In Germany, the average EPEX market price was recorded at 220 USD per megawatt hour which had almost doubled from last year. In France, it had been tripled to close to 300 USD per megawatt hour. This surge in energy prices pushed the major smelters to cut down their productions.
The Aluminium Dunkerque in France, a major producer of Aluminium slab and ingots had reduced its production capacity by 3.7% as compared to previous year. Romanian producers, like Alro, also commentated that Aluminium production had been unsustainable in the final quarter of 2021.
In 2021, the US was the largest importer of the metal. Aluminium prices had been soaring high in the final quarter 2934 USD/MT as compared to the 2004 USD/MT in the first quarter of the year. Aluminium prices are likely to increase in the upcoming times owing to the supply shortages, the shift towards greener economy, the reduction of carbon emissions in China and the rising demand from the automotive industry for electric vehicles. The high prices of energy sources are also key growth drivers in this market.
In Brazil, Alcoa, a major producer of the metal, declared to resume its plant production activities in Sao Luis, Alumar with a plant capacity of 260,000 tonnes per year to keep up with the changing global scenario for the Aluminium market. The plant is resuming operations in spite of the hydro-electric problems in Brazil owing to the drought. This increase in production and supply of Aluminium is likely to impact the market soon. In the final quarter of 2021, Aluminium prices were 14.64k BRL/MT.
For First, Second and Third Quarters of 2021
The production of the metal in China during the first quarter was 6.3 % higher as compared to the previous year. The demand for the metal is being pushed by the shift towards a greener economy and its demand and consumption are expected to go up in the upcoming years.
However, at the same time in China, the carbon emissions were recorded at 420 million tonnes in 2020, which was then capped at 45 million tonnes for 2021 which means that Beijing will witness a change in its supply forms and switch to secondary supply like metal scraps which may generate a market uncertainty.
Other issues are the energy cap imposed on smelters and workers due to the coal shortage. The production plateaued in certain regions which increased the prices along with a growing consumption as more and more people shift towards electric vehicles.
Due to the supply deficit, the prices had been increasing in Europe. Due to excessive Chinese imports, the supply gap for Aluminium was widened as the market was undersupplied by 480,000 tonnes of the metal and this shortage is likely to continue in the upcoming years, as reported by major financial or manufacturing firms like Alcoa, ING and Dutch Multinational. The energy shift towards renewable sources has been a major growth driver for the Aluminium industry.
The prices witnessed a three-year high in 2021 in the US. Production had been booming in China. The market was tight amidst supply concerns. In the meantime supply concerns were rising with the increasing demand for manufactured goods. Aluminium prices in London Metal Exchange were as high as 2535 USD/MT in the second quarter of 2021. The Chinese imports for the metal had increased by 36% in April 2021, which led to the price flare.
For the Year 2020
In the first half of the year, price of the metal China had dropped but started to recover slowly after March. From 2234 USD/MT in the beginning of the year, Aluminium prices plummeted to 1791 USD/MT in March which continued till July, as demands came down due to the shutting down of industries in the first quarter owing to the pandemic.
In July, the price rose again to 2217 USD/MT and dropped to 2188 USD/MT in September. The prices started to rise again in October and surpassed 2500 USD/MT. By December, Aluminium prices in China had reached 2617 USD/MT, the highest in 2020. The Chinese production witnessed record high values at close to 37 million tonnes of production.
The falling demand for the metal due to the pandemic caused the prices to fall steadily in the first half of 2020. The global economy had slowed down as most industries like automobile, aerospace and construction had been hit critically by the lockdowns which resulted a slump in its global consumption and demand.
The Norwegian Aluminium producer Norsk Hydro reported that the primary global consumption had fallen by 9.41% in the first half of 2020. The production however, at the same time, had been steady with a surplus in the market. Nevertheless, the economies started to expand after the lockdowns were lifted and demand and prices were on the rise in the third and final quarters of 2020.
The average price in the US in 2020 was 1704 USD/MT. The demand had plunged in the first half of 2020 as a result of shutting down of industries due to the COVID-19 pandemic. Economic slowdown and a surplus supply caused the prices to decline further.
The Aluminium LME (London Metal Exchange) prices in the beginning of 2020 were 1772 USD/MT which went down to 1602 USD/MT in the first half of the year. This price slump continued till July. However, Aluminium prices started to recover in August and by October the prices had exceeded 1800 USD/MT. In November, the prices went up to 2000 USD/MT and the highest price in the year, 2051 USD/MT, was recorded in the first week of December. The demand for the metal had risen as production activities resumed all around the world.
In Brazil, the prices were affected not just by the pandemic and overproduction, but also by the shutdown of four production lines of Albras due to an electrical fire. In Venezuela, the Aluminium market was crippled due to the absence of a commercial vision, the dropping value of Bolivar exchange rate against USD, infrastructure problems along with political instability in spite of having immense hydroelectric power and modern alumina refinery and bauxite supplies.
Procurement Resource provides latest prices of Aluminium. Each price database is tied to a user-friendly graphing tool dating back to 2014, which provides a range of functionalities: configuration of price series over user defined time period; comparison of product movements across countries; customisation of price currencies and unit; extraction of price data as excel files to be used offline.
Aluminium or aluminum, as a metal, is derived from Aluminium-containing minerals. Small amounts of Aluminium can be easily found in dissolved water. It is light in weight and silvery-white in appearance. The main ore of Aluminium is bauxite. The metal is highly reactive in nature and finds application in a wide range of industries.
|Chemicals, Cans, Foils, Kitchen utensils, Window frame, Beer kegs, Aeroplane parts, Electrical transmission lines
|7429-90-5, Aluminium, Aluminium Metal, Aluminium powder
|Rio Tinto plc, United Company Rusal Plc, American Elements, PT Timah (Persero) Tbk, Aluminium Corporation of China Limited (CHALCO), Alcoa World Alumina and Chemicals (“AWAC”) (Alumina Ltd)
|Asia Pacific: China, India, Indonesia, Pakistan, Bangladesh, Japan, Philippines, Vietnam, Iran, Thailand, South Korea, Iraq, Saudi Arabia, Malaysia, Nepal, Taiwan, Sri Lanka, UAE, Israel, Hongkong, Singapore, Oman, Kuwait, Qatar, Australia, and New Zealand
Europe: Germany, France, United Kingdom, Italy, Spain, Russia, Turkey, Netherlands, Poland, Sweden, Belgium, Austria, Ireland Switzerland, Norway, Denmark, Romania, Finland, Czech Republic, Portugal and Greece
North America: United States and Canada
Latin America: Brazil, Mexico, Argentina, Columbia, Chile, Ecuador, and Peru
Africa: South Africa, Nigeria, Egypt, Algeria, Morocco
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Aluminium's production process is carried out by combining two processes, namely, the Bayer process and the Hall-Heroult process. The bauxite ore is processed into alumina by utilising these two processes and finally, the obtained alumina is converted into Aluminium.
The displayed pricing data is derived through weighted average purchase price, including contract and spot transactions at the specified locations unless otherwise stated. The information provided comes from the compilation and processing of commercial data officially reported for each nation (i.e. government agencies, external trade bodies, and industry publications).
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Phone:+1 307 363 1045
Phone: +91 1203185500
Phone: +44 7537 132103