For the Quarter Ending June 2022
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.
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.
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
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.
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.
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.