From surging Chinese demand to tense Japanese negotiations and US tariff impacts, the aluminium ingot market displays distinct regional trends.

Key Takeaways

• "Golden March and Silver April" seasonal demand is driving increased operating rates and warehouse outflows in China.
• Overseas aluminium ingot producers are pushing for substantial premium increases for Japanese buyers, driven by US tariffs but Japan's market remains stable.
• US aluminium ingot prices are at record highs due to implementation of import tariffs.

China

In China, local warehouses report a substantial increase in outbound shipments of aluminium ingots, particularly since a sharp surge last week. This accelerated movement of goods downstream suggests improved order volumes, and further increases are anticipated in March, leading to continued inventory reductions.

Entering the second week of March, with the arrival of “Golden March and Silver April” period, the supply demand pattern of aluminium ingot in China continues to improve. As the peak season commences, aluminium ingot inventory has seen a steady increase in downstream operating rates. This has led to stronger warehouse outflows, with major consumption regions experiencing outflows of 1.275 million metric tons in the past week, a slight decrease of 800 metric tons week-over-week.

By March 14, Aluminium ingot prices increased by 1% in China.  The prices increased as China's inventory buildup, has suddenly slowed down this past week. Even though it was slightly above previous years, the recent braking action indicates we might be seeing an inventory turning point as we hover move past March.

Japan

Japan's aluminium market is pretty steady right now with aluminium ingot prices holding their ground week-over-week. The whole alumina panic last year has settled down. Similarly supply worries have eased, and prices have found their comfortable, normal spot again. Our analysts are expecting prices to inch up a bit, but there aren’t any big storms on the horizon.

Aluminium bullion producers overseas have proposed a 7.5% to 14% premium increase for shipments to Japan in the April-June quarter, during recent contract negotiations with Japanese consumers and trading firms. Further price hikes are being discussed due to newly imposed U.S. tariffs.

However, Japanese consumers are hesitant to accept these increases, citing sluggish domestic demand recovery and declining European premiums. This divergence in perspectives between producers and consumers suggests the current negotiations may be longer than expected.

USA

US physical aluminium market premiums have reached record highs amid concerns over impending import tariffs affecting industries like transport, construction, and packaging. Aluminium Ingot prices in the USA rose by 1.9% in this period. We expect premiums to keep climbing, with producers likely to transfer as much of the added tariff expenses as possible.

Despite plans for a new smelter, Century Aluminium's project is hindered by the absence of a firm timeline and affordable power. Consequently, domestic production from scrap remains a potential long-term solution, but in the short term, tariffs will continue to dictate prices of aluminium ingot for the American buyers.