Aluminum prices rose first and then fell in April
According to the Commodity Market Analysis System of SunSirs, on April 27, 2023, the average price of domestic aluminum ingots in the East China market was 18,580 RMB/ton, a daily decrease of 1.40%. Compared to the beginning of the month (April 1), the aluminum price was 18,676.67 RMB/ton, a decrease of 0.52%.
In the long run, after the current high price has fallen, it has been fluctuating sideways within the range of 17,500 to 19,500 RMB/ton. In mid April, aluminum prices improved, breaking through 19,000 RMB/ton within the month, and starting to decline this week.
Overview of recent market trends and motivations
The insufficient precipitation in the southwest and northwest had triggered a trend of reduced production of electrolytic aluminum, driving up the early aluminum price market. Recently, the hype had been released. On the macro level, American consumer confidence had dropped to the lowest level since last July. Concerns about the banking crisis flared up again, the US debt ceiling was approaching, domestic consumption data was weak, policy side stimulus was limited, and the global economic outlook was bleak. The overall performance of the consumer end was average, causing continuous pressure on aluminum prices, and aluminum prices dropped slightly from their high levels.
Destock was obvious during the month
Inventory data: The social inventory of aluminum ingots decreased significantly in April. Inventory data shows that as of April 24th, the social inventory of mainstream regions in China was 838,000 tons, a decrease of 220000 tons compared to the inventory on March 30th and a decrease of 132,000tons compared to the historical inventory of the same period in April 2022.
Export situation was general
The latest data from the General Administration of Customs shows that in March 2023, China exported 497400 tons of unwrought aluminum and aluminum products, a year-on-year decrease of 16.3%; From January to March, the cumulative export volume was 1.3778 million tons, a year-on-year decrease of 15.4%. In March, China imported 205,500 tons of unwrought aluminum and aluminum products, a year-on-year increase of 1.8%; From January to March, the cumulative import volume was 574,800 tons, a year-on-year increase of 7.8%.
In terms of downstream aluminum products: In the first quarter of 2023, the total export volume of aluminum products in China was approximately 1.312 million tons, a year-on-year decrease of 15%; The year-on-year decline in aluminum exports in March was significant, mainly due to a 23.5% year-on-year decrease in plate and strip exports. Other sectors recorded an increase year-on-year, with aluminum profile exports significantly increasing both month on month and year on year.
Domestic production slightly increased
The production of electrolytic aluminum in March was 3.367 million tons, a year-on-year increase of 3.0%; The cumulative production from January to March was 10.102 million tons, a year-on-year increase of 5.9%.
The aluminum production in March was 5.789 million tons, a year-on-year increase of 9.1%; The cumulative production from January to March was 14.323 million tons, a year-on-year increase of 2.9%.
The aluminum alloy production in March was 1.323 million tons, a year-on-year increase of 16.0%; The cumulative production from January to March was 3.129 million tons, a year-on-year increase of 12.3%.
Market outlook
From the supply side perspective, production remained stable in April, and inventory data showed a clear trend of inventory depletion in the electrolytic aluminum industry. The main game point currently lies in the actual supply and demand changes in the later stage. It is expected that aluminum prices will mainly fluctuate around 18,800 RMB/ton in the short term, and it should be watching downstream consumption intensity in the near future.
