Aluminium Ingot Market Sees Uptick Amid Bullish Sentiment and Supply Constraints

In the week ending August 23^rd, the Chinese aluminium market experienced a notable surge, influenced the prices of Aluminium Ingot in China rising by 4%. This uptick reflects a generally bullish market sentiment, driven by several key factors affecting supply and demand. The price increase of Aluminium Ingot was partly fueled by renewed enthusiasm from downstream customers. As the traditional peak season approaches, demand for Aluminium Ingot has rebounded.

Supply-side constraints have played a significant role in supporting prices. China's bauxite imports, a key raw material for Aluminium Ingot production, have maintained an overall growth trend. However, the impact of the rainy season in Guinea, a major bauxite supplier, has become increasingly evident since July, with a notable decline in shipment volumes. Further tightening the supply situation, the alumina spot market has seen sluggish transactions recently. The tight supply of raw ore continues to restrict increases in alumina operating capacity. Overseas alumina supply remains constrained, with prices staying high, adding pressure to the domestic market.

Inventory levels have also played a role in the market dynamics. Domestic Aluminium Ingot inventories continued to deplete throughout the week, with notable decreases in the Gongyi and Foshan regions. The Wuxi region also experienced inventory reduction amid reduced production. This de-stocking trend has been particularly favorable in Gongyi and Foshan. In the East China spot market, shipments dominated transactions, with downstream buyers stocking up to meet rigid demand. While the overall market transactions of Aluminium Ingot were average, holders refrained from aggressive selling at low prices due to optimistic future price outlooks, maintaining a generally stable basis.

Amidst these market movements, significant developments in the industry are shaping future trends. Baotou Aluminum Industry has successfully entered the international electronic aluminium foil market, shipping its first test orders of high-purity Aluminium Ingots (AL99.996%) to Japan. This milestone strengthens Baotou Aluminum's competitive edge in high-end manufacturing and opens new avenues for international cooperation. In a separate development, China's Baoshan Iron and Steel (Baosteel) and Baowu Aluminum are forming a joint venture with Japan's Kobe Steel to produce automotive aluminium sheets. This collaboration aims to supply China's domestic automobile manufacturers from plants in Tianjin and central Henan province, potentially reshaping the automotive aluminium supply chain. This will further increase the demand for Aluminium Ingot.

As the Aluminium Ingot market continues to evolve, these supply constraints and demand fluctuations, will likely play crucial roles in shaping price trends and market dynamics in the coming weeks. While the industry's operating rate remained stable during the week, the continuous improvement of demand could potentially drive a slight increase in prices of Aluminium Ingot shortly.