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Aluminium Ingot Prices Drop in European Market, Demand from Construction Sector Slows
Aluminium Ingot Prices Drop in European Market, Demand from Construction Sector Slows

Aluminium Ingot Prices Drop in European Market, Demand from Construction Sector Slows

  • 19-Sep-2023 3:14 PM
  • Journalist: S. Jayavikraman

At the start of the third week of September, the cost of Aluminium Ingot gets reduced in the European market as the demand from the downstream construction industries gets lowered. The consumers from the local spot market delayed placing large orders by cautious buying amid weak demand. Furthermore, the Russian manufacturing industries plan to shift their dependency toward India to cut their reliance on China for proper feedstock and raw materials supply.

The supply of Aluminium Ingot remains on a higher edge as the Major Aluminium Ingot-producing industry, Norsk Hydro, recently started a new HyForge casting line at its Aluminium recycling plant in Rackwitz, Germany. The company invested USD 42.7 million in opening this production line as it would manufacture low-carbon Aluminium Ingot, contributing to the green transition of Germany. The increased production rate in Europe has been supported by the drive of downstream automobile industries concerning decarburizing manufacturing activity and a significant increase in the use of recycled, post-consumer Aluminium scrap. Furthermore, most Aluminium smelters across the European spot market have shifted their production route from coal and fuels to electric furnaces to lower their carbon footprints. Furthermore, the dependency on secondary and recycled Aluminium has increased in the domestic and overseas markets. Following this, Norsk Hydro has invested in modernizing and expanding the production line of the Alumetal recycling plant in Kety, Poland. Meanwhile, the production cost support plummets as the supply of feedstock Bauxite increases across the globe amidst a recent trade deal signed between Australian Mining company Lindian Resources and Compagnie des Bauxites de Guinee (CBG), Guinea, to explore the feasibility of Bauxite mining in their Gaoual bauxite project, with Boke Bauxite Belt, in Guinea.

The demand for Aluminium Ingot from the downstream construction sector has plunged due to the recent drop in demand for finished metal products and worries of overbuying in the European spot market. The European car makers have been facing tight competition from the overseas Asian and US automotive industries as they gained significant profits in recent months, depriving the European Aluminium Ingot market. The market players anticipated a halt in orders as the local buyers look forward to waiting until the last quarter of 2023 for the market situation to get bullish.

Meanwhile, the Russian Aluminium Ingot market has shown a rising trend as it shifts its dependency from the Chinese market towards India to import upstream Alumina supply to its vast Siberian plants. The world's largest producer of Aluminium Ingot in Russia, Rusal, plans to fill the gap due to rising Aluminium Ingot production in the foreign Chinese mills and less price flexibility for Russia. The deal signed between both countries would uplift the production rate in Russian mills, also providing significant growth to the Indian Aluminium Ingot market.

According to ChemAnalyst, the price of Aluminium Ingot is expected to grow in the next month as the demand from the downstream automotive manufacturing industries is anticipated to rise. Additionally, the consumption rate from the local consumers would increase as the economic condition and market situation recover in the European spot market.

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