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Aluminum prices showcased steady market sentiments after multi-high records

Aluminum prices showcased steady market sentiments after multi-high records

Aluminum prices showcased steady market sentiments after multi-high records

  • 12-Apr-2022 10:26 AM
  • Journalist: Motoki Sasaki

Aluminum prices witnessed gradual but persistent increment in the market dynamics globally due to limited buying inquiries amid fluctuation in three-month LME prices. However, the price of Aluminium soared globally during the first quarter due to hostilities between Eastern European nations and rising crude oil prices. The supply disruption and the imposition of sanctions on Russia from the Western markets also curtailed the supplies of Aluminium and raised the quotations in the International market.

Japan, being the Asia’s biggest Aluminium importer agrees to pay before the beginning of each quarter for primary metal shipments due to the sanctions over Russian supplies. Additionally, the second-quarter Japanese premium for Aluminium was $170/t, down 2.9 percent from the previous quarter, as sluggish demand in Japan and China offset fears about Russian supply disruptions. Also, the prices staggered  because of sluggish demand from the automotive industry, a problem created by the chips shortages. Furthermore, constrained container market and high freight charges created several hindrances to trading metals from Asia to Europe or North America, where premiums are significantly greater. Moreover, market players claim that China is increasing Aluminium exports to address the widening demand-supply gap in western markets. China fell on worries that fresh lockdowns in China, disrupted shipping market amidst the container congestion. Curtailing demand for the metal, and higher interest of Chinese authorities towards environment protection could dent demand and growth in the metal market. Nevertheless, the market maintains a bullish view of on-demand recovery post-COVID-19, coupled with ongoing supply disruptions, pushing inventories in some markets to record low.

In 2021, Russia accounted for 17 percent of Japan's total primary Aluminium ingot imports and 6% of the global Aluminium supply. Aluminum prices reached a record high of nearly $4,000/t in early March 2022, owing to concerns about the impact of disrupted shipments from Russia as well as reduced output due to high power prices. Moreover, the sanction imposed by Australia on Russia came into force with increased supply putting pressure on the market, and prices of Australia-origin alumina moved down by more than 20%. Moreover, the Alumina prices continue to soften as Brazil premium ticks higher.

As per ChemAnalyst, "The Aluminium market is expected to witness a slight growth in April." Moreover, market bulls state that lower demand for Aluminium from downstream sectors and increased production activity will support this slight development in Aluminium prices.

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