For the Quarter Ending September 2024
North America
The third quarter of 2024 for Aluminium Ingot pricing in North America has been characterized by a notable increase in market prices. This uptrend can be attributed to several significant factors shaping the market dynamics. Tightening global supply constraints, driven by reduced inventory levels and a weakened dollar, have played a pivotal role in boosting prices. Additionally, uncertainties surrounding global economic conditions, particularly the impact of geopolitical tensions, have further supported the upward trajectory of Aluminium Ingot prices in the region.
In the USA, which has witnessed the most significant price changes, the market has experienced fluctuations influenced by various factors. Seasonal trends, such as increased construction and manufacturing activities during the summer months, have contributed to the overall positive sentiment in pricing. The 10% increase from the same quarter last year underscores the market's resilience and growth. Despite a slight decline of -1% from the previous quarter in 2024, the overall price comparison between the first and second half of the quarter reflects a 2% increase, indicating a strengthening market sentiment.
As the quarter came to a close, Aluminium Ingot prices in the USA settled at USD 4482/MT CFR Alabama Port, marking a significant uptick and highlighting the prevailing positive pricing environment in the region.
Europe
In Q3 2024, the Europe region witnessed a notable increase in Aluminium Ingot prices, driven by a confluence of key factors shaping the market dynamics. Global supply constraints, exacerbated by disruptions such as the collapse of a water storage pond at Vedanta's alumina refinery in India, have tightened the supply of aluminum, leading to upward price pressure. Additionally, the impact of the Federal Reserve's rate cut announcement and market anticipation of further cuts have bolstered prices. The evolving geopolitical landscape, self-imposed restrictions on Russian imports, and policy changes have further complicated the market environment, contributing to the pricing trend. Germany, experiencing the most significant price changes in the region, saw a price increase of 2% in the second half of the quarter compared to the first half. This increase aligns with the overall positive trend observed throughout Q3. The quarter-ending price of USD 3494/MT FD-Bad Berleburg reflects a stable and increasing pricing environment in Germany, indicative of a positive market sentiment prevailing in the region.
Asia-Pacific
During the third quarter of 2024, the Aluminium Ingot market in the Asia-Pacific region saw a notable uptrend in pricing, particularly in China, where the most significant fluctuations occurred. This trend was propelled by a confluence of factors including a robust demand surge from the construction and manufacturing sectors, logistical challenges within the supply chain, and broader economic influences such as interest rate adjustments by the Federal Reserve. Market dynamics also contended with hurdles like inventory management difficulties, rising costs of raw material alumina, energy usage restrictions in production zones, and inconsistent demand in downstream markets. Despite these pressures, the quarter did experience a marginal -1% dip in prices from the preceding quarter, hinting at underlying market volatility. Yet, within this quarter, a 2% price hike from the first to the second half indicated a phase of market correction and equilibrium. The closing price for high-purity Aluminium Ingot (99.9%) in Shanghai was USD 2776/MT, reflecting a persistent upward momentum in market sentiment over the period.
For the Quarter Ending June 2024
North America
In Q2 2024, the North American Aluminium Ingot market experienced a pronounced upward trajectory, driven by a confluence of critical factors. Supply-side constraints, including raw material shortages and logistical disruptions, played a pivotal role in bolstering prices. Additionally, robust demand from key industrial sectors such as automotive, construction, and energy transition applications further intensified market dynamics. Environmental regulations and sustainability mandates have also elevated production costs, contributing to the pricing surge. The market's bullish sentiment was underpinned by heightened investor interest and strategic stockpiling amid geopolitical uncertainties, exacerbating the supply-demand imbalance.
Focusing on the USA, the Aluminium Ingot market epitomized this quarter’s bullish trend, marked by a significant price escalation. Seasonality influenced price patterns, with demand peaking due to summer-driven consumption and industrial activity ramp-up. The USA market observed an 11% year-on-year increase in prices, reflecting strong economic resilience and industrial recovery. Quarter-on-quarter, prices rose underscoring an accelerating demand curve and persistent supply challenges.
A comparative analysis within the quarter revealed a price increment between the first and second halves, indicating sustained upward momentum. The pricing environment remained robust, driven by persistent supply constraints, heightened industrial demand, and strategic market behaviours, thereby affirming a stable-to-positive outlook for Aluminium Ingot pricing in North America.
Asia-Pacific
In Q2 2024, the Aluminium Ingot market in the APAC region witnessed a noticeable uptrend in pricing, driven by a confluence of factors. A significant driver was the robust demand from key sectors such as automotive, construction, and infrastructure, wherein aluminium's lightweight and durable properties play a crucial role. Additionally, global supply chain disruptions, including geopolitical tensions and environmental regulations, constrained supply, further exacerbating the price elevation. Increased production costs, owing to rising energy prices and raw material expenses, also contributed to the upward momentum. Investment in new technologies and green initiatives aimed at reducing carbon footprints added to the operational costs, underpinning the higher pricing landscape. Focusing on China, which experienced the most pronounced price changes, the overall trend was bullish. Seasonal dynamics, such as heightened construction activities in the summer months, amplified demand, contributing to price hikes. The correlation between increased demand and reduced inventory levels was evident, reinforcing the upward trajectory. The price for Aluminium Ingot in China rose by 2% from the same quarter last year and marked a 3% increase from the previous quarter of 2024. This positive sentiment underscores the market's resilience amidst fluctuating global economic conditions and highlights the enduring strength of demand-supply dynamics in the APAC region's aluminium sector.
Europe
The second quarter of 2024 has been characterized by a consistent upward trend in Aluminium Ingot prices in the Europe region, driven by a confluence of factors. A significant impetus for this rise has been the geopolitical tensions impacting energy costs and supply chains. As European energy prices soared, aluminium smelters faced increased production costs, catalysing higher market prices. The imposition of stringent environmental regulations also contributed to supply constraints, particularly in bauxite mining and alumina production, exacerbating the price surge. Furthermore, the ongoing sanctions on Russian aluminium have disrupted global supply chains, compelling European markets to seek alternative, often costlier, sources. Focusing on Germany, the country witnessed the most pronounced price changes. This robust growth reflects the heightened demand from downstream industries, notably the automotive and construction sectors, which saw a moderate recovery. Seasonal factors also played a role, with manufacturing activities typically ramping up in the spring, further bolstering demand. The price comparison between the first and second half of the quarter shows a 3% increment, indicating a steady upward trajectory throughout the period. Concluding the quarter, the price for Aluminium Ingot signifying a stable yet positive pricing environment. This consistent increase underscores the resilience of the German market amid broader European supply challenges, reflecting sustained demand and strategic market adjustments.
For the Quarter Ending March 2024
North America
The North American region experienced an overall increasing trend in Aluminium Ingot prices during the first quarter of 2024. This upward movement can be attributed to several significant factors that influenced the market prices. The region witnessed a surge in demand from various industries, such as construction and automotive, as economic conditions improved. Additionally, the growing focus on clean and renewable energy sources, including the electric vehicle sector, drove up the demand for Aluminium Ingot.
In the USA, which saw the maximum price changes, the price of Aluminium Ingot increased compared to the previous quarter in 2024. This upward trend can be attributed to the improving economic conditions and the gradual decrease in the impact of persistent inflation in the market. Furthermore, the correlation between the first and second half of the quarter showed a positive price change, indicating a sustained upward trajectory.
On March 25, Century Aluminium announced it would get up to $500 million from the U.S. Department of Energy (DOE) Office of Clean Energy Demonstrations as part of the Industrial Demonstrations Program (IDP). Century's Green Aluminium Smelter Project will receive Bipartisan Infrastructure Law and Inflation Reduction Act funding, which is designed to demonstrate commercial-scale decarbonisation solutions to move energy-intensive industries towards net zero. Century Aluminium plans to utilise the amount for building the first new US primary aluminium smelter in 45 years, aiming at doubling the size of the current US primary aluminium industry and strengthening domestic economies and its position in the global market. The smelter will also foster domestic supply chains of a critical material like aluminium, which is much needed for the green energy transition, including electric vehicles, renewable energy production and storage, building and construction, and sustainable packaging.
Asia-Pacific
The first quarter of 2024 has been challenging for the Aluminium Ingot market in the APAC region, with prices experiencing a significant decrease. Several factors have influenced the market, leading to this negative trend. Demand from downstream industries, particularly in the automotive and construction sectors, has been subdued, resulting in lower consumption rates. Additionally, disruptions in the supply chain, such as the explosion at the fuel depot in Guinea, a major producer of Bauxite, have caused concerns about potential shortages of raw materials for alumina production. This has led to an increase in the price of feedstock and subsequently impacted the price of Aluminium Ingot. China has seen the maximum price changes in the region. The market has been relatively stable, with a slight decrease in prices compared to the same quarter last year. The price change from the previous quarter in 2024 was recorded at -1.8%. Overall, the pricing environment for Aluminium Ingot in the APAC region during Q1 2024 has been negative, with prices experiencing a consistent decrease. Factors such as subdued demand and disruptions in the supply chain have contributed to this trend.
Europe
The first quarter of 2024 has been characterized by increasing prices for Aluminium Ingot in the Europe region. Several significant factors have influenced market prices during this period. Firstly, there has been a decline in the supply rate of Aluminium Ingot, particularly from a global feedstock supplier. This raised concerns about a potential shortage of raw materials needed to produce Aluminium Ingot. Additionally, there has been a surge in demand from downstream industries, particularly in the construction sector. This increased demand has put upward pressure on prices. In Germany, the price changes for Aluminium Ingot have been the most pronounced. Overall, there has been a positive trend in prices, with an increase of 1.4% compared to the previous quarter. When compared to the same quarter last year, prices have decreased by 1%. However, there has been a slight decline in prices in the second half of the quarter. In summary, the first quarter of 2024 has seen increasing prices for Aluminium Ingot in the Europe region, driven by factors such as a decline in supply and increased demand from downstream industries. In Germany, prices have shown a positive trend overall, with a slight decline in the second half of the quarter.
For the Quarter Ending December 2023
North America
Aluminium Ingot pricing in North America for Q4 of 2023 showed a declining trend amidst several factors. Firstly, In the initial period of October, Aluminum Alloy ingot prices in the USA experienced a decline influenced by global macroeconomic factors, including inflationary pressures and construction setbacks in China. Lower selling and increased stocks in domestic warehouses further contributed to the downturn. The anticipated Inflation Reduction Act (IRA) failed to boost demand as expected. A UAW strike in the automotive sector shifted demand downward, impacting the economic landscape across the USA.
In early November, prices rose as production shifted south, reducing inventory levels. However, hesitation to place orders arose due to expectations of a potential federal interest rate increase. Recycling partially offsets consumption, and international collaboration on can-capture equipment occurred. The underwhelming impact of the IRA limited demand, while concerns about raw material shortages in Guinea contributed to an upward price trajectory.
December saw another decline in prices due to global macroeconomic factors, persistent high inflation, and an expected Federal Reserve interest rate hike. Despite firm orders from domestic downstream industries amid a historically downturned market, overall uncertainty persisted in the USA's Aluminum Ingot market. The latest price of Aluminium Ingot (99.9%) DEL Alabama Port (USA) for Q4 of 2023 was USD 4201/MT.
Asia-Pacific
The APAC region witnessed a stable market for Aluminium Ingot pricing in the last quarter of 2023 (Q4). In the Chinese market, Aluminum Ingot prices remained stable in the starting weeks of October, attributed to weakened demand from the automotive and construction sectors, influenced by a strong US dollar. Supply-side challenges, including disruptions from floods in the north and reduced feedstock supply from Guinea due to a fuel depot explosion, led to price uncertainty. Despite the lowest statistics in five years, post-holiday inventory faces pressure due to sluggish downstream industries and market rumors. The domestic Aluminum extrusion sector sees subdued demand, prompting Chinese manufacturers to maintain a downward pricing trend. In November, a stable pricing trend persisted domestically, driven by decreased demand, prompting mills to consider production reductions. China's announcement of approximately USD 14 billion in local government bonds aimed at stimulating the economy, somehow supported the market trend. While certain Aluminum billet factories scaled back production, ingot casting volume increased month-to-month. Expectations of reduced production by Aluminum smelters in Yunnan suggest continued high domestic supply, with ongoing uncertainty in economic conditions contributing to stable demand and prices. Supply chain disruptions, including the Red Sea incident, raised freight charges, collectively contributing to an upswing in prices for Aluminum Alloy Ingots. The latest price for Aluminium Ingot (99.9%) Ex Shanghai in China for the last quarter was USD 2653/MT, reflecting a marginal increase of 0.6% compared to the previous quarter.
Europe
The last quarter of 2023 (Q4) for Aluminium Ingot in Europe witnessed a bearish market with high supply and low demand. In October, the German Aluminum Ingot market saw a slight decline due to reduced demand in the automotive and construction sectors, attributed to persisting challenges faced by German automobile manufacturers, including high inflation and fierce competition from Chinese and American companies. Excess inventory accumulated as manufacturers struggled to reach pre-2019 demand levels. Solar energy infrastructure improvements, initially scheduled for October, were postponed, further impacting Aluminum Ingot demand. In mid-Q4, November, prices persisted stability as demand shifted southward from the automotive industry. Norsk Hydro expressed concerns about growing competition from the Chinese electric vehicle industry affecting downstream manufacturing in Germany. Winter and Christmas holidays led to further price declines, particularly in construction activity. The European spot market witnessed a 7.5% year-on-year increase in aluminum output, contributing to rising domestic inventory levels. Amidst market uncertainty and potential federal interest rate hikes, steady buyer orders have maintained stability in the German Aluminum Alloy Ingot market. In December, prices declined again due to ongoing challenges in the automotive and construction sectors, excess inventory, and postponed solar energy infrastructure improvements. Despite these challenges, domestic downstream industries continued to place firm orders amid historical price fluctuations. The latest price of Aluminium Ingot (99.9%) FD-Bad Berleburg in Germany for Q4 is USD 3070/MT.
For the Quarter Ending September 2023
North America
In the US spot market, Aluminum Ingot prices during Q3 2023 exhibited significant fluctuations. Prices began to decrease in July's first week, driven by increased supply from China and subdued US buyer demand. Surplus inventory prompted a cautious approach among buyers. This trend persisted throughout July, as the excessive supply from Chinese mills also influenced global markets. Downstream sectors like automotive and construction hesitated to place large orders, partly due to labor shortages. By late July, prices rebounded due to rising clean energy and US infrastructure demand. August saw price stability, with US interest rate hikes instilling buyer caution. Optimism grew with new auto and construction deals and electric vehicle sector expansion. September brought downward pressure due to macroeconomic factors: high inflation, potential interest rate hikes, and the Inflation Reduction Act Dampened Aluminum Ingot demand. Inventory levels rose, and consumption dipped, especially in construction and automotive. Prices rebounded by September's end, thanks to increased demand from downstream auto and housing sectors, alongside inflation easing and substantial industry investment. Amid global economic conditions and industry-specific demand fluctuations, the US Aluminum Ingot market faced a challenging quarter affecting price dynamics.
Asia-Pacific
The Chinese Aluminum Ingot price remained stable in the third quarter as the domestic market had a turbulent summer. In June, prices initially stabilized due to consistent automotive demand, while the construction sector remained sluggish. Uncertainty crept in as cautious interest rate policies in the US and Europe led to smaller orders. Increased domestic production in the second week of June led to higher inventories, and hopes rested on government stimulus measures. July brought mixed price movements. The third week saw rising inventories and weak demand from key sectors, pushing prices up. The fourth week saw a decline with no substantial changes. August was stable, influenced by low demand, a strong US dollar, and supply disruptions. Government incentives for housing and weak overseas demand further affected prices. Though government policies aimed to boost markets in September, demand remained feeble. Shifts in Russian aluminum producer Rusal's raw material source to India played a role. New government plans and sluggish demand growth towards the end of September maintained price stability. Uncertainty lingered as domestic aluminum supply slowed and imports remained steady, with the upcoming Mid-Autumn festival expected to keep trade conditions stagnant.
Europe
In the third quarter, the German Aluminium Ingot price held steady amidst reduced demand in construction and low inventory in the spot market. Heavy rainfall in the overseas Chinese market disrupted construction activity and lowered the consumption rate of Aluminium Ingot. Market uncertainty stemmed from the European Federal Reserve's cautious approach to interest rates, driving large buyer orders. July saw price fluctuations due to stable production, tight supply, and weak demand in the automotive and construction sectors. Inflation and global competition added complexity. August witnessed a price drop due to a heatwave, interest rate hikes, low water levels in the Rhine River, and rising energy costs. September also brought fluctuations as inflation and competition kept demand in check. However, prices rose by the end of Q3 as construction and auto sector demand improved. Factors like lower inflation and government construction support played a role. Increased bookings from local and overseas consumers and supportive government policies kept prices higher. The German Aluminium Ingot market saw stability and fluctuations driven by weather, economic trends, and global competition.
For the Quarter Ending June 2023
North America
In the second quarter of 2023, the Aluminium Ingot prices showed an overall declining price trend amid uncertain economic conditions coupled with the rising inflation rate. In April, the price of Aluminium Ingot decreased due to reducing demand from the downstream construction industry amid surplus availability of imported Aluminium Ingot at a cheaper price provoking the local mills to reduce their offer prices. In May, the debt crisis that ensued due to the simultaneous downfall of major banks in the USA caused a drastic effect on the US marketing condition and provoked the buyers to hold back from placing large orders amidst rising fears of dwindling Aluminium Ingot prices. The inventory level remained high throughout this quarter as the consumption rate decreased in the US market. As a ripple effect of rising inventory levels, the US government imposed countervailing duties on the imported Aluminium Ingots from the overseas European and Asian markets. The tariff imposition provoked local buyers to increase consumption of the locally manufactured Aluminium Ingot and decrease the inventory level in the US spot market. Consequently, the prices of Aluminium Ingot (99.9%) for DEL Alabama (USA) got settled at USD 4198/MT in the second quarter ending June 30.
Asia Pacific
The Chinese Aluminium Ingot prices showed a bearish market trend in the second quarter of 2023. The initial decline in price in early Q2 was due to decreased downstream demand amidst an uptick in inventory levels. The arrival of the Chinese Dragon Boat Festival, along with the Labor Day holidays, had affected consumers' demand and purchasing rate in the local Chinese market. The supply of Aluminium was on a higher edge as China is the world's largest producer of Aluminium Ingot amid increased production rates in the local Chinese mills. In the H2 of the second quarter, the feedstock Alumina prices declined due to surplus supply across China. The inventory levels grew again as the destocking of Aluminium Ingot slowed down, which provoked the buyers to place minimal orders to sustain at a lower price. The motive for the lower CO2 emission had increased their dependency on the use of recycled Aluminium, which ultimately reduced the demand and price of Primary Aluminium Ingot produced in the Chinese Industries. Consequently, the prices of Aluminium Ingot (99.9%) for Ex Shanghai (China) got settled at USD 2625/MT in the second quarter ending June 30.
Europe
The German Aluminium Ingot market witnessed a dwindling price momentum in the second quarter as the downstream demand decreased amid an increase in supply. The uncertain economic conditions caused by the Trading Controversies and turmoil in the banking industry contributed to a slowdown in sales and commenced a pessimistic market sentiment in the German market. Technological advancement and structural changes, triggered a decline in production costs that reduced the Aluminium Ingot price. The tariff imposed by the US government due to increased local inventory levels has reduced the export quantity. In May, the increase in interest rate applied by the German government to overcome the rising inflation rate and to stabiles, the uncertain economic condition resulted in plummeting of Aluminium Ingot price. The downstream automobile and construction sector showed a decline in the operation rate, reducing Aluminium Ingot consumption. As per market players, the buyers remained in the wait-and-watch situation as they were expecting a further decline in price in the German spot market. In late June, the increased import from the Chinese suppliers caused an oversupply in the local inventories that provoked the mills to reduce the offer price for the Aluminium Ingot in the German spot market. Subsequently, the prices of Aluminium Ingot (99.9%) for FD-Bad Berleburg (Germany) got settled at USD 3091/MT in the second quarter ending June 30.
For the Quarter Ending March 2023
North America
In the US domestic market, Aluminium ingot prices experienced an upward trend during the first quarter of 2023 due to dwindling inventories and increased demand from downstream industries. According to market participants, the US premium charges edged higher this quarter because buyers need to attract more metal and on forecasts for higher demand. Western market premiums for Aluminium Ingots rose with rising Chinese demand following the lunar new year holiday that balanced against tight supply levels caused by production curtailments in the West. However, the uncertainty in the market following the collapse of two US banks contributed to the first drop in the US Midwest aluminum premium since mid-February. Despite increased domestic supply and inflows of imported Aluminium Ingots, participants in the market were not concerned about oversupply because downstream demand was in its peak season, and stockpiles of Aluminium ingots drastically decreased. As a consequence, the Aluminium Ingot (99.9%) prices for Ex Alabama (USA) were fixed at USD 4455/MT in the quarter ending March 31.
Asia- Pacific
Throughout the first quarter of 2023, the Asia-Pacific market showcased stagnant Aluminium Ingot prices. Initially, market participants reported plentiful inventory levels and weak demand from the downstream automotive industry amidst the Chinese New Year Holidays. In addition, the cost support was diminished, alumina prices were constant, and thermal coal costs were declining. However, the operating rates of domestic aluminum processing companies continued to fall. Since the end of February, the inventory build-up slowed down as seasonal destocking began, and domestic social inventory continued to fall on the back of high downstream consumption. The short-term Aluminium prices went up, driven by improving market fundamentals. The restart of production by aluminium smelters in Sichuan, Guizhou, and other locations resulted in a slight increase in supply. The trading activity was muted by high aluminum prices and traders being cautious about purchasing after the delivery of long-term orders, causing shipments out of warehouses in major markets to drop. As a result, Aluminium Ingot prices for Ex Shanghai (China) settled at USD 2744/MT in the quarter ending on March 31.
Europe
In the first quarter of 2023, the Aluminium Ingot prices showcased mixed market sentiments in the European region. In January, Aluminium Ingot prices increased with high premium prices due to the anticipation of recovering demand in China after the lunar new year holiday. According to trading firms, some consumers asked for long-term fixed-premium supply deals in the last week of January, indicating that premiums in Europe bottomed. However, prices of Aluminium Ingot started to decline in the second half of Q1, pressured by weak demand and a rapid build-up of inventories in exchange warehouses. According to manufacturers, production was temporarily curtailed, and no increase in production was seen because power prices had fallen. With trading controversies and banking industry turbulence, consumer confidence was undermined across the metal marketplace, and purchasing was done on a hand-to-mouth basis. As per market players, demand from downstream house construction industries also reduced, resulting in fewer transactions for Aluminium Ingot. Thus, the discussion of Aluminium Ingot for Ex Berleburg (Germany) settled at USD 3725/MT on March 31.
For the Quarter Ending December 2022
North America
In the final quarter of 2022, the Aluminium Ingot prices showcased an up-swinging trend in the US market owing to the limited availability of the product caused by continued tightness in the material's availability. According to manufacturers, the leading cause of this tightness was transportation bottlenecks forced by a lack of containers, shippers, and truck drivers, as well as long wait times at ports and other transportation hubs. In October, the headwinds such as US and LME will ban Russian Aluminium had surged the prices for Aluminium Ingot. However, in mid-Q4, the Aluminium Ingot prices edged down amidst the Thanksgiving holiday. Some market participants cite that the benchmark aluminium premium for Russian and non-Russian Aluminium continued to diverge, especially given renewed market speculation that the US may ban Russian Aluminium. Alcoa, the largest US aluminium producer, had warned investors that high energy and raw material costs and a drop in aluminium prices were putting pressure on margins.
Asia Pacific
In the Q4 of 2022, the Aluminium Ingot prices showcased a stagnancy in their price trend in the Chinese market as the pandemic continued to limit consumption on demand, and purchases were made in response to rigid demand. Although the Sichuan and Chongqing areas were promoting the process of production resumption, the overall supply had declined. Some smelters in Yunnan province increased production cuts early in the fourth quarter, while recovery in Guangxi and Sichuan provinces was slow. On the demand side, downstream operating rates fell short of expectations during the traditional seasonal highs in October and November. Nonetheless, the demand side maintained momentum with the fading of previous influencing factors and the policy boost. Aluminum billet conversion margins had fallen to discounts, while spot premiums for aluminium ingots also dropped and diverged across regions. During the traditional off-season, downstream consumption was low. Some aluminium processing plants intended to close early for the Chinese New Year.
Europe
In the European market, Aluminium Ingot prices showcased a declining trend in the fourth quarter of 2022 amidst production curtailment and fluctuating demand dynamics. In October and November, market participants were concerned about supply disruptions owing to the explosions at the Nord Stream Pipelines. Manufacturers claimed that the situation in Aluminium was dire; production activity was reduced by nearly 50%. Due to the weak consumer demand and a bleak economic backdrop, Hydro's Karmy and Hydro Husnes Aluminium plants in Norway curtailed production activity. Furthermore, the LME has concluded that it will not ban Russian Aluminium. In December, the ongoing decline in downstream demand, combined with the low-carbon differential, kept the Aluminium Ingot market under pressure. Few sellers and buyers were on scheduled holidays and will enter the market in the first or second week of January. As a result, the FOB Hamburg Aluminium ingot (99.9%) price settled at USD 3521/MT.
For the Quarter Ending September 2022
North America
In the US market, Aluminium Ingot prices witnessed an upsurge amidst the fears of recession during the third quarter of 2022. According to market participants, gliding energy costs now significantly impact aluminium smelters more than ever before. As a result of the ripple effect, the aluminium smelters raise their production costs, affecting the Aluminium prices. Aluminium prices, on the other hand, rose earlier in the session due to LME production curtailment amid rising energy costs but succumbed later to macroeconomic pressures as weak growth means lower demand for base metals used in many industries. When the dollar is strong, metals traded in US dollars are more expensive to holders of other currencies, and rising interest rates and weak global demand have all weighed on industrial metal prices. As a ripple effect, the Aluminium Ingot (99.9%) prices for CFR Albama Port (USA) settled at 3820/MT.
Asia Pacific
Aluminium ingot prices in the Chinese market showed a mixed trend due to fluctuating demand and higher inventory levels. According to market participants, the supply of aluminium ingots is still increasing, while the most recent inventory statistics show that inventories of aluminium ingots have stopped falling, indicating the impact of the seasonal low in July. Furthermore, base metal prices were under severe pressure as increasingly hawkish central banks harmed the global outlook for construction and manufacturing activity. At the same time, Chinese smelters increased output as factories resumed operations with increased capacity following Covid lockdowns. Domestically, high temperatures combined with scarce rainfall weighed heavily on aluminium production in Sichuan, where almost all smelters suspended production activity, resulting in a loss of about 1 million mt. Traders are aware of the market's concerns about falling aluminium supply, which could push up aluminium prices, but in the long run, demand will remain weak, and aluminium prices will face downward pressure once production resumes in the region. Thus, the Aluminium Ingot (IC 20) discussion for Ex Shanghai (China) settled at USD 2749/MT.
Europe
During the third quarter of 2022, the Aluminium Ingot prices surged owing to the bullish demand outlook in the European region. As per market players, the production activity fell in the European market during Q3 amidst skyrocketing energy costs. Overall, aluminium production has been limited recently, leading to a decline in supply. In the short term, traders should be aware of the market's concerns about falling aluminium supply, which may push up aluminium prices; however, demand will continue to be sluggish in the medium to long term, and aluminium prices will face downward pressure once production resumes in the future. In mid-August, Norsk Hydro announced its production suspension plans for an aluminium smelter. Market players cite that surging energy costs have induced temporary shutdowns of smelters in European regions, supporting the recent uptick in base metal prices. As a result, the Aluminium Ingot (99.9%) prices for FOB Hamburg (Germany) settled at USD 3658/MT.
For the Quarter Ending June 2022
North America
Due to weak demand, rising production costs, supply chain delays, and the Federal Reserve's aggressive monetary policy, Aluminium ingot prices fell in the United States during the second quarter of 2022. Market participants cite that manufacturing activity has slowed due to supply-chain delays and labor shortages. Furthermore, new orders and stockpiles were limited, and customer resistance to high prices slowed new orders, but this also reflected deficiencies and growing concern about the outlook. The drop in domestic demand and improved Aluminium production activity in the face of rising inflationary pressure exacerbated market concerns. However, the bearish macroeconomic outlook and dwindling demand prompted a drop in quotation inquiries. The closure of the Hawesville Aluminium Smelter exacerbates the supply chain and impacts the US cumulative demand outlook.
Asia Pacific
Chinese Aluminium ingot prices fell in the second quarter of 2022 as demand in China fell amid sporadic lockdowns. According to market participants, the currencies have shifted unfavorably, with the dollar strengthening and the yuan weakening. As work and production resumed in Shanghai and other locations and market sentiment improved, domestic Aluminium downstream consumption increased. Although the procurement was completed as needed and the market transaction remained unsatisfactory, the warehouse issue continued to impact the poor market transaction. Although the domestic pandemic's impact on transportation eased in May, terminal inquiries remained low. Consumers are likely to buy fewer large appliances as global inflation rises, which reduces demand for industrial metals. The world's major central banks raising interest rates to control inflation may reduce the requirements.
Europe
Aluminium ingot prices in European nations fell in the second quarter of 2022 compared to the first quarter of 2022, owing primarily to fewer buying inquiries amid fluctuating LME prices. However, due to hostilities between Eastern European countries and rising crude oil prices, the global price of Aluminium skyrocketed during the first quarter. Furthermore, supply disruptions and Western market sanctions imposed on Russia were factors in the rise in Aluminium prices. Moreover, premiums fell due to sluggish demand from the automotive industry, dealing with chip shortages. Due to a constrained container market and high freight charges, metal could not be transferred from Asia to Europe or North America, where premiums are significantly higher. European Aluminium smelters continued to reduce production activity due to high energy costs exacerbated by Russia's invasion of Ukraine.
For the Quarter Ending March 2022
North America
Because of the tight demand-supply balance, Aluminium ingot prices have skyrocketed in North America. According to market participants, Aluminium prices increased roughly 21% in March 2022 compared to the end-January 2022, owing to rising geopolitical risks amid the ongoing Russia-Ukraine conflict. In the first week of March 2022, Aluminium prices reached an all-time high of USD 3870/tonne, indicating extreme tightness in the global supply chain. The lower inventory level of Aluminium, combined with a ban on Russian Aluminium exports, has exacerbated metal availability in the rest of the world, keeping prices high until normalcy is restored. Aluminium ingot prices remained high as a result during the first quarter.
Asia Pacific
In the Asia Pacific, Aluminium Ingot prices witnessed an upward trend in the first quarter of 2022. Due to the outrage caused by the pandemic, China put pressure on Chinese authorities to adhere to strict policies in the first quarter of 2022. Along with it, China's controlled carbon emission policy exerts market pressure. As a result, production activity and the supply chain in China are disrupted. However, manufacturers in India claim that the production margin of Aluminium is greater than the demand. Market participants are hoping to break profit records; India, one of the leading Aluminium exporters, will face an opportunity to export Aluminium at high prices. The European demand will boost India's Aluminium exports, propelling the country to the top of the list. Aluminium ingot prices rose due to bullish market sentiments in the first quarter of 2022.
Europe
In Europe, amid ongoing hostilities between Eastern European nations, Aluminium ingot prices have risen. This increase in Aluminium Ingot prices is primarily due to the Russia-Ukraine conflict; Russia is the fifth largest exporter of Aluminium, accounting for 6-8 percent of global Aluminium exports. Ukraine is a supplier of alumina and Aluminium ores to Russia. The conflict between Russia and Ukraine disrupted the value supply chain of various commodities, primarily metals and crude oil. The Australian ban on exporting alumina and bauxite to Russia has posed a significant threat to aluminum production. Australia exports nearly 18-20% of its Aluminium ore to Russia, and the sanctions have reduced production activity. However, other factors influencing production growth include rising coal prices and winter power shortages. As a result of reduced metal production, European nations rely on Aluminium imports. The sanctions imposed on Russia will not be easily lifted. As a result, Aluminium prices are expected to rise by 5-20% in the coming quarter.
