Aluminum prices fluctuated and rose in March
| Gamma-PGA (gamma polyglutamic acid) |
Aluminum prices fluctuated and rose in March. According to the Commodity Market Analysis System of Business Society, the average price of aluminum ingots in the East China market on March 26, 2024 was 19460 yuan/ton, an increase of 490 yuan/ton compared to the average market price of 18970 yuan/ton at the beginning of the month, with a monthly increase of 2.58%.
Electrolytic aluminum fundamentals:
On the supply side, the production of electrolytic aluminum in March was higher than the same period last year. Currently, Shandong, Xinjiang, Inner Mongolia and other regions have good profits and high operating rates. Yunnan region is expected to resume production of 520000 tons by mid April due to the easing of power supply shortages. In addition, Guizhou Anshun Aluminum Industry’s production capacity of 130000 tons, which has been suspended due to technological upgrades, may resume production by the end of March. In terms of production reduction, a certain aluminum plant in Sichuan started to shut down for technical renovation from March 10th until September, which may affect the operation and construction of 125000 tons of production capacity. Overall, there is an expectation of an increase in domestic supply.
Inventory: As of March 25th, the inventory of electrolytic aluminum in the domestic mainstream market was 913000 tons, which is a cumulative inventory of 98000 tons compared to 815000 tons of electrolytic aluminum in the domestic mainstream market on February 29th.
On the demand side: As the traditional consumption peak season approaches, the demand for downstream aluminum industries is gradually recovering; The production capacity operating rate of leading enterprises in the downstream aluminum industry has increased compared to the previous month, with a significant increase in the production capacity operating rate of aluminum profiles, primary aluminum alloys, and recycled aluminum alloys; The production capacity and operating rate of aluminum cables, aluminum plates and strips, and aluminum foil are relatively stable. Recently, the outbound volume of aluminum rods from mainstream consumer areas in China has increased month on month, while the inventory of aluminum rods in various regions of China has decreased.
Cost side: On the raw material side, the production of alumina is higher than the same period last year, and the supply is relatively loose. Although the price of domestic bauxite is high, the market is highly dependent on imported ore. Guinea’s imports are smooth, and the price of alumina is relatively weak compared to electrolytic aluminum, resulting in stronger profits for aluminum plants.
Future Market Forecast
At present, the domestic aluminum ingot supply is at a historical high level, with relatively large actual production. Social inventory is beginning to accumulate, and the absolute value is lower than the same period, mainly due to a significant increase in the proportion of aluminum water. There are rumors in the market that Yunnan will partially resume production in late March, but the probability of large-scale resumption in Yunnan is relatively low, as hydropower has not significantly increased and new energy installed capacity has grown rapidly. However, the promotion of electrolytic aluminum resumption is limited. Supply changes, observe the situation during the rainy season.
On the consumer side, as the traditional peak season approaches, downstream demand may improve. The production capacity of aluminum profiles, aluminum cables, aluminum plates and strips, aluminum foil, primary aluminum alloys, and recycled aluminum alloys is gradually recovering with the resumption of production and work. The future spot trading is expected to improve from the current light trend. It is expected that aluminum prices will continue to fluctuate strongly in the short term, and the market will observe changes in the supply situation during the rainy season in May.
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