Aluminium Ingot Prices Fall Globally Due to Oversupply and Weak Demand

The global Aluminium Ingot market has exhibited signs of weakness in recent weeks, with prices declining across major regions. While overall production has increased, particularly in China, demand from key downstream sectors has been sluggish. In China, in the fourth week of July, Aluminium Ingot prices decreased marginally by 0.3% to USD 2,636 per metric ton EX Shanghai. This decline is attributed to reduced demand from downstream industries during the traditional manufacturing off-season, coupled with increased aluminium production leading to oversupply. The United States has also experienced a decline in aluminium prices, mirroring the global trend.

In the United States, Aluminium Ingot prices fell by 0.73% to USD 4,464 per metric ton DEL Alabama in the week ending July 26th. This decline of Aluminium Ingot price aligns with the steady fall in aluminium prices on both the London Metal Exchange (LME) and China's Shanghai Futures Exchange (SHFE) since early June. The consistent price drop has left Aluminium Ingot buyers uncertain about future price movements, especially as demand has diminished. Weak manufacturing data and uncertainty about future price movements have dampened buyer sentiment. The green transition, while promising long-term growth, has yet to significantly offset weakness in traditional demand sectors.

Germany has seen a 0.85% drop in Aluminium Ingot prices, now standing at USD 3,451 per metric ton FOB Hamburg. This decline is attributed to a lower-than-expected manufacturing PMI for July and significant disruptions from severe weather. The automotive sector, a major Aluminium Ingot consumer, is also under strain. Porsche's production has been delayed due to flooding at a supplier, underscoring the fragility of the supply chain. Meanwhile, BMW and Mercedes-Benz are still seeking reliable alternative suppliers. Additionally, heavy thunderstorms and substantial rainfall has hindered construction and manufacturing activities, further impacting Aluminium Ingot prices.

China, the world's largest aluminium producer and consumer, has seen a surge in output, reaching a near-decade high production. However, this increased production has coincided with a decline in demand from manufacturing industries, leading to oversupply and downward pressure on prices. The Chinese government's recent economic policies have failed to stimulate metal demand, further exacerbating the situation. With production outpacing consumption, the market is likely to remain challenging in the near term.

The global Aluminium Ingot market is facing a challenging period due to a confluence of factors. Overproduction in China, coupled with weakening demand from key industries, has led to a surplus of aluminium and downward pressure on prices. The short-term outlook for the Aluminium Ingot market remains bleak. With persistent oversupply and subdued demand, prices are expected to remain under pressure. Unless there is a significant uptick in consumption from key sectors like construction and automotive, or an effort to curtail production, a sustained price recovery seems unlikely in the near term.