For the Quarter Ending December 2022
North America
Aluminium Sheet prices in the US market showed downward sentiment in the final quarter of 2022 due to lower end-user inventory levels amid bearish sentiment. According to manufacturers, transportation bottlenecks occurred in October caused by a lack of containers, shippers, and truck drivers, and long lead times at ports and other transportation hubs were the primary causes of this tightness. In mid-Q4, headwinds such as the US and LME's ban on Russian aluminium increased the price of an Aluminium sheet. However, during the Thanksgiving holiday, the price of aluminium ingots fell. According to some market participants, the benchmark aluminium premium for Russian and non-Russian aluminium continued to diverge, particularly in light of renewed market speculation that the US may ban Russian aluminium. Alcoa, the largest aluminium producer in the United States, had warned investors that rising energy and raw material costs, as well as a drop in aluminium prices, were putting pressure on margins. Many end users began their new year's vacation earlier than usual this year, despite a slowdown in demand for aluminium sheets.
Asia Pacific
Aluminium sheet prices in China rose in the fourth quarter of 2022 as domestic pandemic prevention and control measures eased. Downstream operating rates fell in China, partly due to the week-long National Day holiday at the start of the quarter. Furthermore, the resurgence of the pandemic following the holiday disrupted downstream enterprise production in Henan and Shandong, causing industry demand to fall. Furthermore, downstream demand was low during the traditional off-season. Some aluminium processing plants planned to close early to celebrate the Chinese New Year. Aluminum billet conversion margins plummeted to discounts, while aluminium sheet spot premiums plunged and diverged across regions. Premiums in Gongyi fall down due to a drop in terminal demand and orders. Domestic operating capacity increased further in December due to the approaching winter and New Year's Day, with restarts in Sichuan and Guangxi and new capacity released in Inner Mongolia and Gansu.
Europe
In the German market, Aluminium Sheet prices showcased a mixed outlook in the fourth quarter of 2022 amid falling premium costs. Aluminium supplies were intact, as the LME had decided not to ban trading in the metal produced in Russia or store it in its warehouses, as substantial players in the market planned to buy Russian aluminium in 2023. Market participants were concerned about further production cuts in European alumina refineries and aluminium smelters due to rising energy costs. Europe's refinery and smelter maintenance plans had not returned to normal since the pandemic began. Aluminum manufacturers claimed that the situation was dire; production had been cut by nearly 50%. Due to weak spot demand and falling underlying premiums, market participants noted that a low-carbon upcharge for upstream aluminium billet required significant effort. However, the outlook for downstream demand was bleak; suppliers of aluminium ingots were hesitant to sell inventories at lower prices. The end-of-year restocking drive was unlikely to happen this year. As demand for aluminium ingots fell, many end users started their new year's vacation earlier than usual.
For The Quarter Ending September 2022
North America
During the third quarter of 2022, Aluminium Sheet prices witnessed a rising trend amidst the effect of inflation and economic uncertainty on customer spending. As per market players, the Labor Day holiday in the US came in the middle of the latest assessment period, on September 5, resulting in no reported activity in an already subdued spot market. Buyers remained stunned about how far this slide had gone. As per the buyer, upstream Aluminium prices are close to bottoming out. However, secondary Aluminium alloy manufacturers who buy primary Aluminium cite that price of Aluminium products had fallen due to a widespread decline in the US Aluminium market. The overall Aluminium market is listing lower. For now, there was a status quo amidst a subdued spot market. As a result, the Aluminium Sheet (1100-H14-0.8 mm) prices for Ex New York (USA) settled at USD 17140/MT.
Asia Pacific
During the third quarter of 2022, the Asia Pacific region witnessed increased demand for Aluminium sheets. The tradeable volume in the Japanese market is low, and there is no incentive to deliver to Japan. Japanese traders and end-users are wary of purchasing metal on the international market. According to market participants, Japan has much stock, and there have been attempts to destock to avoid backwardation and its effects on balance sheets. Despite smelter curtailments announced in Europe, market participants remained bearish due to high inventory levels in Asia, particularly Japan, and were more concerned about forwarding demand. In India, Vedanta linked the prices of its Aluminium ingots and Aluminium products to the London Metal Exchange. China has limited its Aluminium smelting capacity to 45 million tonnes per year and intends to shift primary capabilities to hydropower-rich regions in the country's southeast. Thus, the discussion of Aluminum Sheet (1 mm) prices for Ex Shanghai (China) settled at USD 2685/MT.
Europe
In the European market, Aluminium Sheet prices witnessed a declining trend due to the weak spot demand and good availability of imported units. Several European smelters have recently announced energy-related production cuts, but premiums have continued to fall, with weak demand outweighing potential supply concerns. Duty unpaid premiums also fell, with lower offers reported in the market to entice more buyers. Some participants are concerned about supply, while others believe the smelter cuts will have little impact, with further premium cuts likely in the coming months due to low consumer demand, ongoing recession fears, and increased availability of imported units. While some players still saw ongoing logistics issues as a barrier to imports, others were less concerned, noting that European premiums remained close to recent record highs, making Europe an appealing destination for material imports. As per buyers, market players have been concerned over supply curtailments. Asian units will replace any capacity lost from Europe. The premiums in the Asian market remain low compared to Europe, and freight rates have dropped, so anyone who accesses units there will bring them over. As a ripple effect, the Aluminium Sheet (1100-H14-0.8 mm) prices for Ex New York settled at USD 17140/MT.
