For the Quarter Ending June 2023
North America
In the US market, the Aluminium Alloy Ingot prices showcased a stagnancy in their pricing momentum in the second quarter of 2023 despite lackluster demand. Despite a drop in the US non-farm payrolls, the unemployment rate data showed that the labor market was strong, leading to the expectation that the Fed would increase interest rates. Buyers were refraining from making significant purchases, as producers maintained high offers citing good order books and reduced supply. However, buyers were skeptical about the sustainability of the uptrend in the summer. With both supply and demand on the rise, aluminum prices fluctuated within a range. However, the demand for automobiles remained weak, leading to sluggish orders. As a result, overall transaction volume remained low. Additionally, the US Federal Reserve faced a difficult situation as growing inflation, a sluggish economy, and the risk of credit defaults loomed. Although the operating rate of leading aluminum downstream processing companies increased, downstream enterprises did not show a strong interest in stocking up, resulting in a decline in Aluminium Alloy Ingot prices. As a result, market players raised concerns about a potential recession that could darken the demand outlook for the metal. Under the prevailing high-interest rates, companies hold a relatively pessimistic outlook on future macroeconomic prospects. There was some investor caution around US debt ceiling concerns at the end of Q3. However, Congress approved legislation that suspended the debt ceiling in the first days of June in a deal that included concessions on spending that had little effect on economic growth.
Asia Pacific
In the second quarter of 2023, the Aluminium Alloy Ingot prices showcased dwindling market dynamics in the Chinese market because the operating rates of major secondary aluminium factories were relatively steady in Q2, producing mainly for existing orders. Furthermore, downstream consumption of primary aluminium alloys continued to remain sluggish, which contributed to leading enterprises maintaining their stable operating rates. Fundamentally, domestic aluminium supply maintained a slow upward trend in the second quarter, while demand gradually picked up, and the aluminium ingot social inventory had been in a destocking cycle. Aluminium alloy enterprises restocked as needed, but most downstream enterprises hardly stocked up before the Labour Day holiday. As a result, their operating rates probably dropped after the holiday due to poor new orders. The domestic aluminium ingot social inventory dropped significantly but accumulated slightly after the holiday. The prices were affected by factors such as higher prices for imported materials and moderate transaction levels. Despite higher offers from overseas markets like the Middle East and Western countries, buyers had been sourcing imported materials due to tight supplies in the European market. Chinese importers faced minor losses due to the RMB exchange rate reaching a new low for the year. The price gap between ADC12 secondary Aluminium Alloy and Aluminium Ingot widened further due to decreased demand for the former. In terms of production capacity, the Guizhou and Sichuan regions continued to resume production, but any short-term changes remained limited. The import window was closed due to RMB depreciation, weak domestic demand, as well as overseas ADC12 prices being higher than domestic ones. This, combined with weak demand, kept ADC12 prices moving in a narrow range in the short term.
Europe
In the European market, the Aluminium Alloy Ingot prices showcased an up-swinging price trend in the second quarter of 2023 owing to the stable supply-demand outlook after the United States announced import tariffs on Russian metal. The orders received by primary aluminium alloy companies improved MoM in Q2, but few companies believed that there was a significant improvement in demand in the month. The tightening market supply led to an increase in European Aluminium premiums over the month. Some consumers were reluctant to pay higher prices due to historically high production costs, but supply risks remain, which lead to a change in their decision. The upcharge for Aluminium products continued to remain flat and below the low-carbon differential for Aluminium due to an oversupply of billet on the market. From a demand perspective, the Aluminium Alloy Ingot market was experiencing stability with a positive outlook. Downstream industries such as automotive and die-casting demonstrated a consistent preference for operating conditions. However, the overall demand range remains limited. Concerns over the banking crisis, the approaching US debt ceiling, weak domestic consumption data, and a bleak global economic outlook contributed to pressure on Aluminium prices. As a result, Aluminium prices had slightly declined from their previous highs. A significant portion of the warehouse stock comprises Russian metal, which Western consumers were reluctant to use. However, the levels of aluminum stocks were not increasing at the expected rate, considering the low demand, indicating a thin supply outlook.
For the Quarter Ending March 2023
North America
In Q1 2023, Aluminium Alloy ingot prices in the US market rose due to soaring premium charges amidst banking meltdowns. Rising Chinese demand and production curtailments led to a rise in premiums for aluminium ingot in Western markets. Meanwhile, Section 232 duties were imposed on Russian Aluminium, with Russian Aluminium products facing 200% duties as direct imports into the United States. Potential purchasers of Russian Aluminium were instructed to exercise caution due to the new regulations. Furthermore, the unstable US market after two bank collapses in mid-March led to a drop in feedstock Aluminium Ingot premium. Despite growing supply, downstream consumption was in peak season and social inventories of aluminium ingots had declined sharply, resulting in minimal oversupply concerns. As a ripple effect, the Aluminium Alloy Ingot (A383) prices for Ex Alabama were fixed at USD 3725/MT in the week ending March 31.
Asia Pacific
Throughout the first quarter of 2023, the Chinese market showcased stagnant Aluminium Alloy Ingot (ADC12) prices due to the plentiful inventory level and weak downstream Automotive demand amidst the Chinese New Year Holidays and banking sector turmoil. Although primary aluminium alloy production rates slightly decreased, rates for the aluminium and secondary aluminium alloy sectors remained stable. Large producers maintained normal production, but consumption decreased after the Lantern Festival. Weak downstream demand and anticipation of overseas interest rate hikes, coupled with abundant supply, kept Aluminium Alloy Ingot prices low. In March, seasonal destocking began, and despite high stocks in some regions, limited cargo and raised molten aluminium output led to decreased ingot arrivals and increased prices. However, the fall in aluminium scrap metal impacted ADC12 prices. Traders picked up goods cautiously, widening the price differential between primary aluminium and aluminium scrap and easing cost pressure on secondary aluminium plants. As a result, Aluminium Ingot (ADC 12) prices in the week ending March 31 for Ex Shanghai (China) settled at USD 2675/MT.
Europe
In the first quarter of 2023, the Aluminium Alloy Ingot prices remained stagnant in the European market due to several factors, including hand-to-mouth purchasing activity, ongoing production curtailments, and fluctuating premium charges. In January, the premium prices ascended due to the anticipation of recovering demand in China after the lunar new year holiday and higher US premiums. Despite this, purchasing remained on a hand-to-mouth basis, and low liquidity persisted due to the lack of demand from the aluminium and casting sectors, despite some superficial improvements in downstream industries. European producers had a hard time competing with low-cost third-country imports and other local suppliers liquidating their positions, while power prices remained high, up to three times higher than two years ago. Although demand for commodities was healthy due to China's reopening and the global focus on energy security and decarbonization/electrification, the limited supply made the European aluminium market vulnerable to any increase in demand. Despite the capacity being taken offline, the Aluminium Alloy Ingot prices did not recover from the precipitous drops that began a year ago. Thus, the discussion of Aluminium Alloy Ingot (A383) in the week ending March 31 for Ex Alabama (USA) settled at USD 3725/MT.
For the Quarter Ending December 2022
North America
In the US market, the Aluminium Alloy Ingot prices showcased a mixed trend in the fourth quarter of 2022 amidst shortages of containers and labor. In October and November, rising premium costs provoked the Aluminium Alloy Ingot prices to surge due to transportation bottlenecks caused by a lack of containers, shippers, and truck drivers, as well as long wait times at ports and other transportation hubs. Domestic market participants were most concerned about European production curtailment and their potential spillover effects on the US market. In December, Aluminium Alloy Ingot prices fell by more than 1.4% as the market began to slow down in preparation for the Thanksgiving holiday. Some producers reduced their offers. Manufacturers witnessed limited profit margins due to the rising COVID-19 cases in China and expectations of a surplus supply next year. Alcoa and other manufacturers had warned that high energy and raw material costs and a drop in aluminium prices put pressure on margins. As a result, the price of aluminium alloy ingot (A383) for Ex Alabama settled at USD 3720/MT during the final week of the quarter.
Asia Pacific
In the Chinese market, the Aluminium Alloy Ingot prices showcased a rising trend in the fourth quarter of 2022, owing to the steady supply and demand outlook. According to market participants, the lower inventory level boosted the price of aluminum in October. Furthermore, the pandemic has hampered transportation. The operating rates of downstream plants in Henan had fallen due to pandemic controls, and the demand outlook in east China was also pessimistic as the traditional off-season approached. On the demand side, November and December witnessed low downstream consumption. Some aluminum processing plants closed early to celebrate the Chinese New Year. Premiums in Gongyi fell due to a drop in terminal demand and orders. Spot premiums remained high due to a lack of supply in the spot market and traders' refusal to sell. Furthermore, the downstream processing industry had reached a seasonal low with weak downstream consumption in December. Thus, the Aluminium Ingot (ADC 12) prices for ex-Shanghai and FOB Shanghai settled at USD 2650/MT and USD 2700/MT during the last week of Q4 2022.
Europe
In the fourth quarter of 2022, the Aluminium Alloy Ingot prices showcased a stagnancy in the price trend in the European market amidst soaring energy costs, significant production curtailments, and weakening downstream demand. Aluminum manufacturers claimed that the situation was dire; production had been reduced by nearly 50%. Major production curtailments such as Hydro's Karmy and Hydro Husnes aluminum plants in Norway were due to low demand. Despite the uncertainty and concerns about rising energy prices, there was a slight panic in the European market. Buyers were well-stocked, and falling end-user demand drove the European aluminum market. According to market participants, there were no concerns about supply for the first quarter of 2023, as players had excess inventory and orders that had already been delayed until 2023. Some restocking of Aluminium Alloy Ingot occurred in the market due to low end-user inventory levels amid bearish sentiment. Prominent buyers curtailed their usual activities to wait until the first or second week of January. As a result, the aluminium alloy ingot (A380) discussions for Ex Willich and FOB Hamburg settled at USD 3238/MT and USD 3300/MT, respectively.
For The Quarter Ending September 2022
North America
The Aluminium alloy ingot market witnessed mixed sentiments in the third quarter of 2022 owing to the cyclical demand dynamics. Aluminium prices plunged in July as the cost of raw materials dropped. The three-month price of Aluminium on the London Metal Exchange (LME) fell from a record high in March, according to domestic participants. Traders claim that the predominant topic in industrial metals has been fear of a recession, as rising energy prices result in a slowdown in production. The Aluminium industry is being impacted more than ever by increasing energy prices. As a result, higher production costs at Aluminium smelters affect Aluminium pricing. In August and September, Aluminium prices rose earlier in the session due to LME output reductions driven by higher energy costs, but they later buckled under macroeconomic pressure since weak growth resulted in decreased demand for base metals used in many industries. A strong currency, rising interest rates, and a weak global market have affected industrial metal prices. As a ripple effect, the Aluminium Alloy Ingot prices for Ex Alabama settled at USD 3745/MT.
Asia Pacific
Aluminium alloy ingot prices in the Asian market increased in the third quarter of 2022 due to rising interest rates, debts, and cost pressure. Market participants' lower positions on easing demand from consuming industries kept Aluminium prices quiet in July. However, given the energy-intensive nature of the smelting process, high power prices posed a particular problem for Aluminium operators in August and September. A series of lockdowns in China have weighed heavily on demand rather than supply, as the country is a significant consumer of metals. Heatwaves in various provinces of China have also impacted demand amid power shortages, obstructing production as this has been an energy-intensive metal. As a ripple effect, the Aluminium Alloy ingot prices surged. Thus, the Aluminium Ingot (ADC 12) prices for Ex Shanghai (China) settled at USD 2784/MT.
Europe
During the third quarter of 2022, the Aluminium Alloy Ingot prices witnessed an episodic sentiment in the European market amidst soaring energy prices. The ADC 12 prices fell in July due to the muted demand outlook. However, ADC 12 prices soared in August and September as downstream demand remained firm amidst soaring energy prices. Surging energy costs have induced temporary shutdowns of smelters in European regions, supporting the recent uptick in base metal prices. Speira, the European Aluminium rolling company, has considered cutting the output of its German Aluminium smelter to 50% of the total capacity to cope with soaring energy prices. Some Aluminium smelters have suspended their production completely, affecting regional supply for a long time and making consumers more dependent on imported goods. The metal industry in Europe is one of the largest consumers of electricity and natural gas, but the Aluminium and zinc production capacity in this region has dropped about 50% in the past year. As a result, the Aluminium Alloy Ingot (ADC 12) prices for Ex Willich (Germany) settled at USD 3084/MT.
For the Quarter Ending June 2022
North America
During Q2 2022, the Aluminium Alloy Ingot prices witnessed a downward trajectory in the US market owing to muted demand and soaring production costs amidst delays in the supply chain and the tightening Federal Reserve's aggressive monetary policy. As per market participants, the growth in production activity slowed as manufacturers persistently faced supply-chain delays and labor shortages. Additionally, new orders and stockpiles were limited, and customers' pushback on high prices contributed to the slowing of new orders, but it also reflected shortages and growing concern about the outlook. Market participants note that manufacturing activity in the United States slowed more than expected in June, with a measure of new orders contracting amid aggressive monetary policy tightening by the Federal Reserve.
Asia Pacific
In the Asian market, Aluminium Alloy Ingot prices witnessed a slightly declining trend during the second quarter of 2022. However, Aluminum Alloy Ingot prices surged in April due to the low inventory level and soaring raw material prices. Furthermore, concerns about overstressed supply chains, global cost-push, and sanctions on Russian Aluminium exports strained the supply chain. Likewise, Aluminium Alloy Ingot prices fell in May and June due to low demand and limited transactions in the regional market. Additionally, market participants are trimming their positions on easing demand from consuming industries, mainly keeping Aluminium Alloy Ingot prices lower. As per market players, with the rising inflationary pressure, central banks are raising interest rates to slow down their economic growth rates, impacting metal demand adversely, primarily Aluminium and steel.
Europe
In European nations, the Aluminium Alloy Ingot prices witnessed a declining trend in the second quarter of 2022 compared to the first quarter of 2022, primarily due to the 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. Moreover, supply disruption and imposed sanctions on Russia from Western markets were the backdrop reasons for the increased costs of Aluminium. Furthermore, premiums fell because of sluggish demand from the automotive industry, dealing with chipset scarcity. Again, because of a constrained container market and high freight charges, it was unfeasible to transfer metal from Asia to Europe or North America, where premiums are significantly greater. As a ripple effect, Aluminium smelters in the European region persisted in curbing their production activity due to the high energy costs aggravated by the Russian invasion of Ukraine.
For the Quarter Ending March 2022
North America
In the US market, the Aluminium Alloy Ingot prices witnessed higher demand projections for Aluminium in Q1 of 2022 owing to the robust demand, lower inventory level, and tight demand-supply balance amidst the Russia-Ukraine combat. Russia's invasion of Ukraine, coupled with the US sanction on Russian Aluminium exports, aggravated the metal availability, keeping prices at a high level. According to market participants, despite higher imports, the shipments into North America remain below record volumes recorded in 2017. Additionally, the US government is stepping up efforts to promote low-carbon steel and Aluminium production and procurement. In line with this, the administration announced in mid-Q1 that it would implement measures to strengthen its competitiveness in the manufacturing sector.
Asia Pacific
During the first quarter of 2022, the Aluminium Alloy Ingot prices witnessed an upsurge trend in the Asian market, owing to the muted demand and soaring production cost. Manufacturers cite the slowed global growth, high inflation, and skyrocketing raw material costs dampened demand from the construction sector, particularly in top consumer China, where persistent COVID outbreaks hampered economic activity. As per market participants, the rate of destocking of Aluminium alloy ingots has slowed as the pandemic has hit the consumption hubs of Jiangsu, Zhejiang, and Shanghai. The operating costs of Aluminium processing enterprises fell, particularly in Shandong, where operational rates fell due to the pandemic. Amidst this, the rising energy, soaring fuel costs, and inflated raw material prices have skyrocketed the market of Aluminium Alloy Ingot globally. According to the Indian market players, the feedstock Aluminium prices in March rose nearly 20 % compared to the end of January.
Europe
In the European market, the Aluminium Alloy Ingot prices showcased an inclining trend owing to the robust demand and soaring raw material costs amidst the extending hostilities between Eastern European nations. As per market participants, Aluminium smelters in Europe continued to reduce their production due to the high energy costs exacerbated by Russia's invasion of Ukraine. Further, the worries of prolonged supply crunches, global cost-push pressure, and the sanctions on Russian Aluminium exports squeezed out the supply chain. However, fuelled by the rising geopolitical risks, global Aluminium prices skyrocketed nearly 17% in March, showing severe tightness in the worldwide supply chain. The sharp rise in raw material c has impacted the several end-user sectors already facing input cost surges. As a ripple effect of lower inventory levels and soaring raw material prices, the Aluminium Alloy Ingot prices surged.
