For the Quarter Ending September 2024
North America
The third quarter of 2024 for Aluminium Wire pricing in North America has been characterized by a downward trend, with significant factors influencing market prices. Additionally, the market has experienced a decrease compared to the same quarter last year, reflecting challenges in supply and demand dynamics. Moreover, A key driver of this decline has been oversupply, exacerbated by global economic uncertainties and regulatory changes impacting trade flows.
In Mexico, which has seen the most substantial price changes, the market has been volatile due to newly imposed tariffs and disruptions in supply chains. Furthermore, seasonal factors and the implementation of tariffs have led to price fluctuations. The correlation in price changes between the first and second half of the quarter, indicates a sustained downward trajectory. Conversely, demand is notably low, primarily due to challenges in the automotive sector, a key consumer of Aluminium Wire products.
Moreover, the latest quarter-ending price underscores the negative pricing environment, reflecting a challenging period marked by uncertainties and market instability.
APAC
In Q3 2024, the Aluminium Wire market in the APAC Region saw a notable increase in prices, driven by various factors shaping the market dynamics. Additionally, supply stability, influenced by factors like increased production levels and external market conditions, played a crucial role in the price uptick. Moreover, Demand conditions were moderate, with challenges stemming from economic uncertainties and fluctuating consumer sentiment within the region.
China, being a significant player, experienced the most substantial price changes, with a bullish trend observed in the market. Additionally, the quarter showcased a positive correlation between supply adjustments and price movements, with minor fluctuations between the first and second halves of the quarter. Despite a slight dip from the previous quarter, the overall trend was upward, reflecting a resilient pricing environment.
The quarter-ending price of USD 3479/MT of Aluminium Wire (8011- 10 mm) FOB Tianjin in China solidified the positive trajectory witnessed throughout the quarter. Furthermore, notable disruptions included logistical challenges and supply chain adjustments, impacting market dynamics.
Europe
Throughout Q3 2024, the Aluminium Wire market in Europe experienced a notable uptrend in prices, with Germany showcasing the most significant price changes. Furthermore, this increase was influenced by several key factors. Firstly, a surge in demand from the aviation sector, particularly driven by large orders from major airlines, played a crucial role in boosting prices. Additionally, supply constraints in global alumina and bauxite resources heightened production costs, further supporting the price surge. In Germany specifically, the market saw a balanced supply situation, with the commissioning of a new aluminium billet casting line in a neighbouring country contributing to improved regional supply capabilities. Despite challenges in the manufacturing sector, the overall trend in Europe indicated a positive outlook for Aluminium Wire prices. Moreover, the quarter recorded a 3% price increase from the previous quarter, with a notable increase between the first and second halves of the quarter. Ultimately, the quarter ended with Aluminium Wire in Germany, reflecting a bullish pricing environment.
For the Quarter Ending June 2024
North America
The North American Aluminum Wire market navigated a complex landscape in Q2 2024, characterized by steady underlying demand but significant operational challenges. The automotive and construction sectors remained key drivers of demand, while the market grappled with various economic and supply chain pressures.
Upstream, aluminum prices experienced volatility due to fluctuating energy costs, geopolitical tensions, and inconsistent raw material availability. These factors directly impacted production costs for aluminum wire, leading to margin compression for manufacturers. Downstream, the automotive industry continued its robust performance, sustaining strong demand for aluminum wire. However, the construction sector faced headwinds from rising interest rates and economic uncertainty. Inflationary pressures and supply chain disruptions further complicated the market dynamics, challenging both producers and consumers. In response, manufacturers prioritized cost optimization, inventory management, and strategic partnerships to navigate the quarter's complexities.
Government policies supporting infrastructure development and clean energy initiatives offered potential long-term growth opportunities for the aluminum industry, although their immediate impact remained limited. Despite these challenges, the North American aluminum wire market demonstrated resilience, adapting to the volatile economic environment while maintaining steady production to meet consistent demand from key sectors.
APAC
The second quarter of 2024 has witnessed a pronounced uptrend in Aluminium Wire pricing across the APAC region. This quarter has been characterized by a resilient demand environment, driven by robust economic activities and strategic governmental support for infrastructure projects. Factors like increased production capacity, higher operating rates, and significant demand from automotive and construction sectors have collectively propelled market prices. The pricing environment has been bolstered by a tight supply landscape, exacerbated by logistical challenges and geopolitical tensions which have added to production costs. Moreover, supply disruptions, such as production cuts at major smelters and maintenance shutdowns, have further constrained the availability of aluminium wire, contributing to the price surge.
Focusing on South Korea, the market has experienced the most significant price fluctuations in Q2 2024. The overall trend indicates a strong positive sentiment, with aluminium wire prices displaying a consistent upward trajectory. Seasonality played a role, with demand peaking due to heightened construction activities and a recovery in the automotive sector, resulting in a 3% increase from the previous quarter. The correlation in price changes was also evident, as the market adjusted to the evolving supply-demand dynamics. Comparing the first and second halves of the quarter, prices rose by 2%, reflecting sustained demand pressures and limited supply. The quarter culminated with aluminium wire prices reaching USD 3632/MT CFR Busan, underscoring a buoyant and escalating pricing environment.
Europe
The European Aluminum Wire market navigated a complex landscape in Q2 2024, characterized by steady demand but significant challenges. Automotive and construction sectors continued to drive demand, while the market grappled with upstream volatility and downstream pressures.
Aluminum prices fluctuated due to energy costs, geopolitical tensions, and supply chain disruptions, impacting production costs and squeezing manufacturer margins. The automotive industry remained resilient, sustaining demand for aluminum wire. However, the construction sector faced headwinds from economic uncertainty and rising energy expenses. The EU's Green Deal policies, focusing on sustainable transportation and construction, offered potential long-term growth opportunities, though their full impact is yet to materialize. Manufacturers responded to these market conditions by emphasizing cost management, operational efficiency, and strategic partnerships to maintain profitability.
Overall, Q2 2024 presented a mixed picture for the European aluminum wire market, balancing steady demand against various economic and operational challenges. The industry's ability to adapt to these pressures while positioning for future growth opportunities will be crucial in the coming quarters.
For the Quarter Ending March 2024
North America
The first quarter of 2024 witnessed a consistent rise in prices for Aluminium Wire across North America, driven by various influential factors shaping the market dynamics. This price surge can be linked to heightened demand from sectors like construction and automotive as the region experienced economic improvements. Moreover, the increasing emphasis on clean energy sources, particularly within the electric vehicle industry, further bolstered the demand for Aluminium Wire.
Century Aluminium's recent announcement on March 25 detailed its approval for receiving up to $500 million from the U.S. Department of Energy's Office of Clean Energy Demonstrations under the Industrial Demonstrations Program. This funding, part of the Bipartisan Infrastructure Law and Inflation Reduction Act, aims to support Century's Green Aluminium Smelter Project, showcasing large-scale decarbonization solutions for energy-intensive industries as they move towards achieving net-zero emissions. The allocation from the U.S. DOE will facilitate the construction of the first new primary aluminium smelter in the United States in over four decades. This initiative by Century Aluminium seeks to enhance the domestic primary aluminium industry, bolster national economies, and solidify the country's global market presence. Additionally, the new smelter will help in establishing local supply chains for essential materials like aluminium crucial for various sectors such as electric vehicles, renewable energy, construction, and sustainable packaging.
Within the United States, where the most significant price fluctuations were observed, Aluminium Wire prices saw an increase during the first quarter of 2024 compared to the previous quarter. This upward trajectory is primarily attributed to the improving economic landscape and the gradual easing of inflationary pressures in the market. The positive price trend observed between the first and second halves of the quarter indicates a sustained growth pattern for Aluminium Wire prices.
Asia-Pacific
In the APAC region, the Aluminium Wire market in Q1 2024 experienced a stable pricing environment overall, with moderate supply and demand levels. Several factors influenced market prices during this quarter. Firstly, there was a slight increase in demand from the downstream construction and housing sectors, particularly in China, which contributed to a modest price increase. Additionally, the automotive industry saw a decline in sales, impacting Aluminium Wire prices negatively. However, the shortage of raw materials such as Bauxite from international sources and advancements in green Aluminium production supported elevated prices. In South Korea, the pricing environment for Aluminium Wire during Q1 2024 was also stable, with moderate supply and demand. Similar to the APAC region, the downstream construction sector experienced a decline in demand due to harsh weather conditions and snowfall, leading to a slowdown in manufacturing activity. However, the automotive industry sustained strong demand, particularly in the electric vehicle segment, which supported prices. In terms of price changes, there was a slight increase in prices compared to the same quarter last year. However, there was a decrease in prices compared to the previous quarter in 2024. Overall, the pricing environment for Aluminium Wire in the APAC region and South Korea during Q1 2024 was stable, with moderate supply and demand levels. The market was influenced by factors such as the construction and automotive sectors, raw material shortages, and advancements in green Aluminium production.
Europe
In the first quarter of 2024, the Europe region experienced a notable upswing in prices for Aluminium Wire, influenced by several significant factors. Primarily, there has been a reduction in the supply of Aluminium Wire, particularly from a major global feedstock supplier, raising concerns about potential raw material shortages for Aluminium Wire production. Furthermore, there has been a notable surge in demand from downstream industries, especially in the construction sector, driving prices upward. In Germany, the price fluctuations for Aluminium Wire have been most pronounced, exhibiting an overall positive trend compared to the previous quarter. However, when compared to the same quarter of the previous year, prices have shown a slight decline observed in the second half of the quarter. To summarize, the first quarter of 2024 witnessed a rise in Aluminium Wire prices in the Europe region, attributed to factors such as reduced supply and heightened demand from downstream industries. In Germany, prices demonstrated an overall positive trend, despite a minor decline in the latter part of the quarter.
For the Quarter Ending December 2023
North America
During the fourth quarter of 2023, the North American market for aluminum wire displayed a combination of trends, indicating an overall state of stability. Initially, the U.S. spot market for aluminum wire experienced a decline in prices, attributed to weakened demand from the automotive industry and increased macroeconomic uncertainty in the early part of Q4. In mid-Q4, aluminum prices surged due to inadequate stock accumulation during the consumption off-season. Tighter spreads and potential inventory squeezes played a role in driving the uptick in restocking activity.
The Federal Reserve's decision to maintain interest rates signaled a recovery in the U.S. economic market, prompting significant orders from both local and overseas buyers. In December, the consistent trend in aluminum wire pricing reflected reduced demand during the winter and holidays. This was exacerbated by disruptions in trade routes, including those through the Panama Canal and the Red Sea, caused by drought and rebel attacks.
Supply concerns from Guinea, triggered by an oil depot explosion, combined with adverse weather conditions, resulted in reduced demand from the construction sector, leading to a slowdown in U.S. manufacturing activity. Towards the end of the year, there was evidence of seasonal strength and increased restocking activity driven by attractive prices.
Asia-Pacific
In the fourth quarter of 2023, Aluminium Wire prices in the South Korean market remained stable initially, driven by limited inquiries from the power and distribution sector. Factors contributing to this stability included concerns about the banking crisis, the impending US debt ceiling, stagnant domestic consumption data, limited policy stimulus, and a gloomy global economic outlook. Despite decreased demand from downstream industries, Aluminium Wire supply remained firm, leading to an increase in local inventory levels. The boost in Bauxite inventory was due to increased imports from Guinea, driven by heightened mining activity and sustainability initiatives with the West-African LNG Group. However, downstream automotive manufacturing industries experienced a slowdown due to competition from Chinese producers. In November, South Korean Aluminum Wire prices surged due to constrained supply and increased demand from the automotive and construction sectors. Disruptions in the Panama Canal route and limited imports of vital materials like Bauxite contributed to the scarcity. December witnessed consistent Aluminum Wire prices, influenced by decreased demand during the winter and holiday seasons. Trade route disruptions, adverse weather conditions, and a slight decline in Bauxite supply further challenged the market, causing a slowdown in manufacturing activity across South Korea. The quarterly price of Aluminium Wire (8011- 10 mm) CFR Busan in South Korea for Q4 2023 was USD 3424/MT.
Europe
During the final quarter of 2023, the European Aluminum Wire market exhibited a modest upward trajectory, influenced by various factors impacting prices. Challenges in the supply of Aluminium Wire were observed in the German spot market, attributed to lackluster performance amid economic uncertainties, leading to limited supply levels. Noteworthy considerations included European interest rate expectations and fluctuations in the non-ferrous metals market. Hydro Energi successfully secured a long-term power purchase agreement with Alpiq for 1.18 terawatt-hours of energy spanning from 2024 to 2032, supporting Norsk Hydro's efforts to expand its electricity supply, with a focus on renewable sources. In November, Aluminum Wires in Germany witnessed a price increase due to a combination of low supply and heightened demand from the automotive and construction sectors. Optimistic market sentiment prevailed due to factors such as Bauxite scarcity, disruptions in the Panama Canal, and robust demand from downstream industries. However, by December, Aluminum Wire prices stabilized as winter and holiday periods led to a decline in demand, compounded by trade disruptions and reduced demand from the construction sector due to adverse weather conditions. The supply of feedstock encountered challenges stemming from an oil depot explosion in Guinea, contributing to manufacturing slowdowns across Germany.
For the Quarter Ending September 2023
North America
The United States Aluminum Wire market has exhibited noteworthy trends. Initially, prices surged due to a 25% increase in local interest rates by the US Federal Reserve Board, aimed at controlling inflation. This decision proved lucrative, spurring demand, particularly within the photovoltaic system industry. Alcoa, a prominent player in the US Aluminum industry, facilitated energy transition in Aluminum Wire mills in Brazil and resumed mining operations in Western Australia, bolstering the domestic market. The automotive sector, notably Tesla's electric vehicle sales, significantly contributed to heightened Aluminum consumption. However, supply constraints persisted due to reduced local mine production and export restrictions imposed by Indonesian suppliers. Modernization efforts in Brazilian and Australian mines affected US production rates. In August, Aluminum Wire prices stabilized as demand from the automotive industry remained steady despite economic uncertainties. Bauxite imports from Guinea surged, bolstering feedstock inventory, as Guinea's mines adopted sustainable practices and increased output. Market uncertainties, elevated inventory levels, and rising interest rates prompted cautious buyer behavior. Competition from Chinese producers dampened downstream automotive demand, while the renewable energy sector held promise for driving Aluminum Wire demand. Additionally, anticipated adverse weather conditions could impact production costs in the forthcoming months.
Asia-Pacific
The South Korean aluminum wire market in Q3 2023 experienced a rollercoaster of price fluctuations. July marked a price surge driven by reduced manufacturer offers and weakened purchasing activity. High prices for PRN packaging materials and low recycling rates impacted Aluminum's durability, leading to predictions of reduced domestic demand and increased overseas recycling. As a result, domestic aluminum wire prices initially declined, mirroring trends in India, where production levels dipped due to weak demand. Global economic uncertainty and increased import tariffs on raw Aluminum further pressured prices, prompting cautious buying. The rise in US interest rates also dampened export demand from sectors like automotive manufacturing, adding to the pressure. However, by mid-Q3 2023, South Korean aluminum wire prices rebounded thanks to steady inquiries from the power and distribution sector. Yet, concerns about the US debt ceiling, sluggish domestic consumption, limited policy stimulus, and a gloomy global economic outlook persisted. Stable supply led to increased local inventory levels, with boosted imports of bauxite from Guinea promoting sustainable fuel use in mining. Demand remained subdued in construction but surged in the battery foil and electrical/electronic sectors. Short-term expectations indicated a positive trend in aluminum prices with a focus on downstream consumption intensity. Overall, the market displayed resilience despite ongoing challenges.
Europe
The Aluminium Wire market has shown a stable trend in Germany during the third quarter. Prices initially surged due to improved economic conditions and reduced local inventories. Indonesian export restrictions tightened supply, raising spot market prices. Additionally, a contract with Indian rail giant Alston increased demand for Aluminium Wires, as parts were to be produced in France, leading to higher export quotas from Germany. The European market is considering lifting the ban on Russian Aluminium imports as supply and demand have stabilized thanks to Russia's largest Aluminium producer, Russell. Alcoa's mining permit for its Aluminium Wire mine in Western Australia and government recognition of Aluminum's importance further bolstered the market. Domestic Aluminium Wire supplies remained tight due to the Indonesian mining ban and reduced German factory activity. The electric vehicle sector's recovery and a 0.25% rate hike stabilized inflation and boosted demand. In August, prices remained static due to high Bauxite supply and limited local orders. Meanwhile, downstream industries like shipbuilding, clean energy, and automotive showed promise, with companies like Volvo and Tesla expanding production across Europe. Despite economic uncertainties and cautious buyers, the Aluminium Wire market is expected to see increased demand in the coming months as production rates rise and economic conditions stabilize.
For the Quarter Ending June 2023
North America
In the second quarter of 2023, the Aluminium Wire prices declined amid uncertain economic conditions coupled with the rising inflation rate. In April, the price of Aluminium Wire showed a decrease in price due to reducing demand from the downstream construction industry amid surplus availability of imported Aluminium Wire at a lower price from the overseas market, provoking the local mills to reduce their offer prices. In May, the debt crisis that happened 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 as the Aluminium Wire prices could experience further decline. The tariff imposition was to increase consumption of the locally manufactured Aluminium Wire and decrease the inventory level in the US spot market. The inventory level remained high as the consumption rate decreased in the USA. This resulted in the imposition of countervailing duties by the US government on the imported Aluminium Wires from the overseas European and Asian markets.
Asia-Pacific
The Chinese Aluminium Wire industry showed a declining market trend in the second quarter of 2023. The arrival of the Chinese Dragon Boat Festival, along with the Labor Day holidays, affected the demand and purchasing rate of consumers in the local Chinese market. The initial decline in price in April was due to decreased downstream demand amid increased inventory levels. The supply of Aluminium was on a higher edge as China is the world’s largest producer of Aluminium Wire 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 motive for the lower CO2 emission has increased their dependency on the use of recycled Aluminium, which ultimately reduced the demand and price of Primary Aluminium Wire produced in Chinese Industries. The inventory levels grew again as the destocking of Aluminium Wire slowed down, which provoked the buyers to place minimal orders to sustain at a lower price.
Europe
The German Aluminium Wire market showed a decline in price in the second quarter as the downstream demand decreased amid an increase in supply. The advancement in technology, along with the structural changes, caused a decline in production costs that reduced the price of Aluminium Wire. The uncertain economic conditions caused by the Trading Controversies and turbulence in the banking industry contributed to a slowdown in sales and formed a pessimistic market sentiment in the German market. The tariff imposed by the US government due to increased local inventory levels has reduced the export quantity. In May, the German government applied the increase in interest rate to overcome the rising inflation rate and to stabiles the uncertain economic condition resulting in plummeting of Aluminium Wire price. 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 Wire in the German spot market. The downstream automobile and construction sector showed a decline in the operation rate that reduced the Aluminium Wire consumption.
For the Quarter Ending March 2023
North America
The prices of Aluminium Wire in the US market rose in the first quarter of 2023 due to increased premium costs amid financial market turmoil. Market players noted that this trend began after a series of smelter curtailments last year and was further fueled by sustained supply issues and rising demand expectations surrounding China's return to the market. Market participants claimed that US premiums were rising to attract more metal, and Western market premiums for aluminium ingots also increased due to speculation of rising Chinese demand. However, the collapse of two US banks and market uncertainty contributed to the first drop in the US Midwest aluminium premium since mid-February. Despite this, market players remained unconcerned about oversupply, as downstream demand was in its peak season, and stockpiles of Aluminium Wire had significantly decreased, despite increased domestic supply and imported inflows.
Asia Pacific
In Q1 2023, Aluminium Wire prices in China were sluggish due to high inventory levels and low buyer sentiment. Raw material aluminium ingots fell four consecutive times in January before rebounding. The social inventory of aluminium had exceeded expectations, suppressing prices. Downstream demand had been delayed, leading to stable supply and high inventory levels. In early February, prices had been rangebound with no new lows or highs. Aluminium Wire prices had been stable, with improving downstream demand. Inventories had plateaued, and traders had awaited the start of the destocking process. The Federal Reserve's hawkish statements had pressured nonferrous metals prices. Operating rates and sales had increased month over month as peak season approached. Aluminium Wire inventories had increased as the tight supply of aluminium scrap had eased in March. Traders had picked up goods aggressively while delivering cautiously. According to manufacturers, several domestic smelters had resumed production, causing Aluminium Wire prices to edge downward in the Chinese market.
Europe
In Q1 2023, European Aluminium Wire prices experienced a notable increase due to mounting premium costs over raw material Aluminium prices amid a lack of demand in the electrical power transmission sector. Raw material Aluminium premiums had surged by roughly 16% since the beginning of the year. Despite ample inventories of Aluminium Wire in the spot market, premiums remained high due to elevated production charges. Freight prices had declined, and the European market had faced no significant competition from the Asian market. However, the spot market experienced weak demand for Aluminium Wire in Q1, even from reliable end-users. Energy prices had decreased and hovered at a moderate level. Despite this, there had been further cutbacks in the domestic market, indicating a shift of primary production to Asia. Aluminium stock levels in exchange warehouses had surged due to companies like Glencore delivering Russian metal that could not be sold to end-users. Despite low demand, European Aluminium Wire prices had remained higher than other regions, attracting tonnages from overseas market players despite eased overseas Aluminium Wire prices and a closed arbitrage window in China.
For the Quarter Ending December 2022
North America
Aluminium wire prices in the United States were mixed in the fourth quarter of 2022 owing to transportation bottlenecks caused by a lack of containers, shippers, and truck drivers, as well as long lead times at ports and other transportation hubs. Participants in the US market were concerned that additional European production cuts had caused the material to become extremely tight in October, causing psychological consequences in the US and raising premiums. Due to the bleak outlook for downstream demand in November and December, suppliers of aluminium wires were hesitant to sell inventories at lower prices. The ongoing decline in downstream demand, combined with the low-carbon differential, puts downward pressure on the aluminium market. Manufacturers report that some restocking of aluminium wire occurred in the fourth quarter due to low end-user inventory levels and bearish sentiment. The end-of-year restocking drive was unlikely to happen this year. Instead, due to a drop in demand for aluminium wire, many end users started their new year's vacation earlier than usual.
Asia Pacific
Aluminium wire prices rose in the Chinese market in the fourth quarter of 2022 as pandemic control and prevention measures were eased. In October, the market was under supply-side pressure. According to market participants, the production reduction had raised aluminium wire prices to some extent. However, market players paid attention to the demand-side situation and waited for the operating rates of top-tier aluminium fabricators. In November, aluminium wire prices surged amidst the continuation of zero-COVID control and prevention measures. However, demand for downstream goods was low during the traditional off-season. Some aluminium processing plants closed early to celebrate the Chinese New Year. As a result, the inventory of aluminium wire remained low in December. Aluminium billet conversion margins had fallen to discounts, while spot premiums on aluminium ingots had also fallen and diverged across regions. Premiums in Gongyi fell due to a drop in terminal demand and orders. As a ripple effect, the Aluminium Sheet (3004-1 mm) prices for ex-Shanghai and FOB Tianjin settled at USD 2747/MT and USD 2799/MT.
Europe
Aluminium wire prices in the European market showed a mixed trend in the fourth quarter of 2022 due to production curtailment and a fluctuating demand outlook. Market participants were concerned about supply disruptions in October, particularly in light of the recent Nord Stream pipeline explosions. As the most energy-intensive base metal to produce, aluminium is particularly vulnerable to Europe's energy situation, with significant production cuts and weakening demand. Aluminium producers claimed that the situation was dire, with production reduced by nearly 50%. Due to rising energy costs, production cuts in European alumina refineries and aluminium smelters in November heightened market concern. Furthermore, suppliers claimed that alumina prices in Australia were extremely volatile in September, with shipments out of Western Australia being delayed due to heavy rain. Europe's refinery and smelter maintenance plans had not returned to normal since the pandemic began until December. Suppliers of aluminium wire were hesitant to sell inventories at lower prices because the outlook for downstream demand had been bleak. Thus, market players opted for a wait-and-watch outlook during the end of the final quarter of 2022.
For the Quarter Ending September 2022
North America
In the North American market, Aluminium Wire prices showcased a rising trend despite subdued spot demand during the third quarter of 2022. Aluminium marched higher in August and September, worrying that stoppages due to high energy prices or other disruptions would spur shortages. Due to the high energy intensity of base metal production, market participants are observing production reductions in Europe. Market participants are in a position where they don't need to push from consumption to get price hikes because more cuts are on the way; Europe's energy crisis is far from over. Furthermore, since energy prices began to rise last year, European smelters have reduced annual aluminium production by 800,000 to 900,000 tonnes. According to the buyer, upstream aluminium prices are close to bottoming out. However, secondary aluminium alloy manufacturers who buy primary aluminium report that the cost of aluminium products has fallen due to a general decline in the US aluminium market.
Asia Pacific
In the Japanese market, Aluminium Wire prices showcased a rising trend amidst a bearish demand outlook. As per market players, the tradeable volume is low, with no incentive to deliver to Japan. Japanese traders and end-users are wary of purchasing metal on the international market. In Japan, there is a significant volume, and suppliers try to destock to avoid backwardation and its effects on balance sheets. Despite smelter curtailments announced in Europe, market participants remained bearish due to high inventory levels in Asia, particularly Japan, and were more concerned about forwarding demand. Manufacturers claim that, while orders are up, inflation is starting to bite, and downstream industries such as the automotive industry will suffer. On the other hand, fourth-quarter negotiations have begun, with lower offers received than those heard in the third quarter. The South Korean market remained unchanged from the previous week due to weak buying activity.
Europe
Aluminium Wire prices witnessed a gliding movement during the third quarter of 2022 due to the weak spot demand and abundant supply of imported units. Over the last six to eight weeks, the spot demand outlook for wire has weakened, and imports are currently outpacing capacity loss from production cuts. Some participants expected the cuts to have little effect on the premium due to softer demand and a recent increase in Asian imports, while others remained bullish due to concerns about ingot availability. Participants are also concerned about overall aluminum availability as LME warehouse stocks continue to decline. Participants state that logistics issues remained a concern when attempting to source units from other regions. While some saw ongoing logistics issues as a barrier to imports, others were less concerned, noting that European premiums remained close to recent record highs, making Europe an appealing destination for material imports. Europe's high energy and electricity costs have forced several smelters to close this year. Alcoa announced in August that it would cut production at its Lista smelter in Norway by one-third.
For the Quarter Ending June 2022
North America
Aluminium Wire prices fell in the United States during the second quarter of 2022 due to weak demand, rising production costs, supply chain delays, and the Federal Reserve's aggressive monetary policy. According to market participants, manufacturing activity has slowed as manufacturers face supply-chain delays and labor shortages. Furthermore, new orders and stockpiles were limited, and customer resistance to high prices contributed to a slowing of new orders, but it also reflected deficiencies and growing concern about the outlook. The drop in the domestic demand and improved production activity of Aluminium amidst the rising inflationary pressure further aggravated the market queries. However, the bearish macroeconomic aspects and waning demand outlook further prompted quotation inquiries to drop. The cessation of the Hawesville Aluminium smelter further exacerbates the supply chain and impacts the cumulative demand outlook in the U.S
Asia Pacific
Chinese Aluminium Wire prices fell in the second quarter of 2022, owing to shrinking demand in China amid sporadic lockdowns. According to market participants, the currencies have shifted unfavorably, with the dollar strengthening and the yuan weakening. Domestic Aluminium downstream consumption increased as work and production resumed in Shanghai and other locations, and market sentiment improved. The procurement was completed as needed, and the market transaction remained unsatisfactory, but the warehouse issue continued to impact the poor market transaction. Although the problem of poor transportation caused by the domestic pandemic eased in May, terminal inquiries remained modest.
Meanwhile, in June, domestic Aluminium inventories fell due to the scandal surrounding the repeated pledge of the same Aluminium wire stocks in a social warehouse. A surge in global inflation, driven partly by rising energy costs, means that consumers will likely buy fewer large appliances, lowering demand for industrial metals. Raising interest rates by the world's major central banks to control inflation may reduce the requirements.
Europe
In European nations, the Aluminium Wire prices declined in the second quarter of 2022 compared to the Q1 of 2022, mainly due to the limited buying queries amid fluctuation in LME prices. However, due to hostilities between Eastern European nations and rising crude oil prices, the price of Aluminium soared globally during the first quarter. Furthermore, supply disruptions and sanctions imposed on Russia by Western markets were factors in the rise in Aluminium prices. Moreover, premiums fell due to sluggish demand from the automotive industry, dealing with chip shortages. Again, 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. As a result of the high energy costs exacerbated by Russia's invasion of Ukraine, European Aluminium smelters continued to reduce production activity.
For the Quarter Ending March 2022
North America
In North America, Aluminium wire prices witnessed soaring market sentiments owing to the tight demand-supply balance. According to market players, Aluminium prices showcased a sharp increase of roughly 20 percent in March 2022 compared to end-January 2022, fuelled by rising geopolitical risks amidst the ongoing Russia-Ukraine combat. Aluminium prices have touched an all-time high of USD 3870/tonne in the first week of March 2022, showing extreme tightness in the global supply chain. A low inventory level of Aluminium worldwide coupled with the sanction on Russian Aluminium exports has exacerbated the metal availability in the rest of the world, holding prices at a high level till normalcy is restored. Aluminium wire prices remained high during the first quarter as a ripple effect.
Asia Pacific
In the first quarter of 2022, China levied pressure on Chinese authorities to adhere to strict policies due to the outrage of the pandemic. Along with it, China's controlled carbon emission policy also impacts pressure on the market. Thus, in China, production activity and its supply chain are disrupted. However, in India, manufacturers claim that the production margin of Aluminium is more than the demand. Market players are hoping to exceed records in profit; India, one of the leading exporters of Aluminium, will confront an opportunity to export Aluminium at high prices. Aluminium prices have risen more than 20 % as compared with January 2022. The demand from the European nation will boost India's exporting activity for Aluminium, making India the lead exporter. As a ripple effect, the Aluminium wire prices witnessed bullish market sentiments during the first quarter of 2022.
Europe
In Europe, the Aluminium wire prices showcased a rising trend amid the ongoing hostilities between Eastern European Nations. This soar in Aluminium wire prices is mainly due to the Russia and Ukraine dispute; Russia is the fifth largest exporter of Aluminium, exporting 6-8% of Aluminium globally. Ukraine is one of the exporters of Alumina and Aluminium ores for Russia. In the conflict between Russia and Ukraine, various commodities' whole value supply chain has been disrupted, mainly metals and crude oil. Australia's ban on exporting Alumina and bauxite to Russia has caused a significant threat to Aluminium's production activity. However, the other factors affecting production growth are elevated coal prices and power pressures from winter. Thus, European nations depend on Aluminium imports as they have reduced metal production. The sanctions imposed on Russia are not going to be removed readily. Therefore, Aluminum costs are expected to surge 5-20% in the upcoming quarter.
