Asian aluminium alloy ingot markets are showing mixed signals this week. In China, inventories dipped slightly, underpinning a modest price rise amid tight scrap availability. Taiwan’s market found support from constrained recycled supplies and growing restocking demand. Meanwhile, Japan extended its price decline as steady imports and cheaper freight outweighed cost pressures. Overall, cost factors and policy shifts suggest a mild upward bias, though lackluster demand may cap gains.
In the week ending August 22, Aluminium alloy ingot prices in China experienced a slight uptick in prices because inventory fell slightly week-on-week. Total secondary aluminium alloy ingot inventory numbered at 31,546 mt, down 97 mt WoW.
On the other hand, the limited availability of aluminium scrap lended some support for aluminium alloy ingot pricing through the input cost of raw materials. Moreover, firms are currently experiencing strong incentives to raise prices in light of the recent news of canceled tax rebates and new taxes, putting further cost pressure on them to the point that price increases are more likely than price declines in the near term.
On the demand side, with the September peak season approaching, there are some signs of a mild rebound in downstream purchasing sentiment, but recovery still lacks momentum. In the short term, aluminium alloy ingot (ADC12) prices should trend upwards, with fluctuations, due to cost support and policy disruptions, although lack of sufficient demand may hinder further upside.
Aluminium alloy ingot prices in Taiwan have found a degree of support due to the tight supply of raw material. Domestic aluminium scrap prices in Taiwan have seen a modest rise in the past week, as a result of a range of local and international pressures.
Another key factor was the limited availability of recycled materials. Due to high summer temperatures and increased environmental scrutiny in some areas, recycling and the respective flow of aluminium scrap have slowed down, resulting in reduced resources available in the marketplace.
Simultaneously, demand for these materials was increasing. Internationally, high primary aluminium prices are driving downstream recycled aluminium plants to source scrap. Domestically, some recycled aluminium alloy ingot businesses are back in operations and restocking their inventories, adding to the demand for recycled materials.
In Japan, the price of aluminium alloy ingot (ADC 12) CFR Tokyo decreased by 6.00% during the week ending August 22. Stable overseas supply and procurement risk subsided due to unhindered import lanes and no maritime disruptions.
Counterbalancing pressures include restrictions on scrap collections resulting in melting costs and ASEAN demand for Japanese precision parts. Falling freight also reduced landed import costs as Drewry’s Intra-Asia Container Index fell 9% to $592 for a 40ft container. Excess aluminium alloy ingot inflows may further decline prices next week.
