For the Quarter Ending June 2023
North America
In the second quarter of 2023, the Aluminium Sheet prices showed a bullish price trend in the North American market amid the tight supply and increased demand from the downstream automobile industry. In April, the inventory level declined as the production rate decreased in the local Aluminium Sheet manufacturing plants. The feedstock Aluminium price also surged as the consumption from the downstream automotive industry remained on the higher verge in the local and Overseas aluminum industries. As per market players, the downstream automobile sector experienced an uprise as the sales of electric vehicles increased, which led to increased consumption of Aluminium Sheets in the US automotive market. Infrastructural development and the rising dependency on renewable energy concerning lower CO2 emission increased the usage of Aluminium ingot in the US spot market. According to market players, the buyers were placing large orders, and restocking was observed as the US Aluminium Sheet market showed a long-term growth rate. Consequently, the prices of Aluminium Sheet Al1100 for DEL New York (USA) settled at USD 15540/MT in the second quarter ending June 2023.
Asia-pacific
In the second quarter of 2023, South Korean Aluminium Sheet prices showcased a downward momentum. A labor union strike decreased overseas demand and halted production in major downstream industries. In April, the overseas demand declined as the economic condition of countries such as the USA and China was crippling. The downstream automobile industries showed a pessimistic market sentiment that provoked the buyers to halt the placement of large orders as the Aluminium sheet prices were expected to shift further downward. In H2 of the second quarter, the shipping industry had pessimistic market sentiment amid labor shortage along with the lowering of wages hurting the local industries. The Korea Enterprises Federation (KEF) were suggesting the government lower the minimum wages for migrant workers having E7 VISA to uplift the earning of the Korean native workers. Around June, the two major Umbrella Unions, the Korean Confederation of Trade Unions (KCTU) and the Federation of Korean Trade Unions (FKTU), started a nationwide protest against President Yoon-Suk-yeol’s administration to protest the suppression of organized labor by the manufacturing and construction giants in South Korea. The ripple effect caused by this hampered the supply chain and reduced the production rate, resulting in an increase in price at the end of the second quarter. The price for Aluminium sheet Al1100 for FOB Busan (South Korea) got settled at USD 3220/MT in the quarter ending June 2023.
MEA
The price of Aluminium Ingot in the United Arab Emirates market showed a continuous decreasing trend throughout the second quarter of 2023. The decreasing price was supported by the fact that the local inventory level was on a higher edge as the import of Aluminium sheets increased from the overseas Indian market. The supply was already surging as the production rate was high amid the Emirate Global Aluminium, a major Aluminium Sheet manufacturer, spending a billion dirhams in industrial development to expand its production capacity, which led to an increase in local inventory in the UAE spot market. The feedstock aluminum supply also remains on a higher edge from the overseas suppliers from the USA and European market, resulting in declining Alumina prices and plummeting the cost support in producing Aluminium Sheet. The Uncertain Global economic condition was considered a major drawback in declining Aluminium Sheet prices in the local as well as global markets. The demand from the downstream automotive industry declined as the buyers were worried about the safety concern from the imported Aluminium Sheet parts that provoked them to halt in placing large orders in the UAE spot market. The price for Aluminium sheet Al1100 for CFR Mina Jebel Ali (United Arab Emirates) got settled at USD 3154/MT in the quarter ending June 2023.
Europe
In the second quarter of 2023, the prices of Aluminium sheets showed an overall increase in the German spot market amid tight inventory levels along with an increase in production cost. In the early weeks of the second quarter, the supply and the flat downstream demand from the automobile industries remained stable. The tariff imposition by the US government led to a small amount of sluggish market sentiment at the start of the second quarter. The price increase later persisted as the feedstock prices surged, increasing the alloy surcharges and production costs rose for the Aluminium Sheets. The downstream automobile sector was expanding as the sales of electric vehicles increased, leading to increased consumption and the rising price of Aluminium Sheets in the German spot market. The hike in the premium cost provoked the mills to sell the Aluminium Ingot at a much higher price. The demand from the overseas market increased as the Italian downstream automobile industry’s demand surged. The rising energy cost and labor shortage caused an uprise in Aluminium Ingot prices in Germany. The price for Aluminium sheet Al1100 for FD-Koblenz (Germany) got settled at USD 11144/MT in the quarter ending June 2023.
For the Quarter Ending March 2023
North America
In the first quarter of 2023, the US Aluminium Sheet market experienced a bearish market sentiment attributed to higher inventory levels amidst banking turmoil. This was a result of a decline in new orders, lower output, and efforts to reduce inventories. Despite improved supply chains and weaker demand keeping manufacturing price pressures in check, there was a slight increase in input costs and selling prices due to sustained upward wage pressures and elevated raw material prices. Concerns over higher interest rates aimed at curbing inflation weighed on stock markets and boosted the dollar, rendering dollar-priced metals more expensive for buyers. Aluminium sheet prices decreased in March as banking turmoil eased but remained under pressure due to concerns over tighter credit that could limit economic growth and metals demand. The base metals market was impacted by the long-tail effect of Silicon Valley Bank's failure and the banking crisis in Europe and the US, resulting in market panic and risk aversion. Though demand gradually improved, the pessimistic macro mood led to a fall in aluminium prices. As a ripple effect, the Aluminium Sheet (1100-H14-0.8 mm) prices for Ex New York settled at USD 15039/MT.
Asia Pacific
Aluminium Sheet prices in Q1 2023 experienced a downward momentum in China due to limited downstream construction demand and cautious buyers. China's export tariffs on aluminium rose, but tariffs were reduced to 7.3% in the new year. Aluminium prices were rangebound in early February, with downstream demand steadily recovering. Aluminium Sheet stocks plateaued, and market participants awaited the destocking process. The Federal Reserve's hawkish statements put pressure on nonferrous metals prices, while downstream operating rates and sales increased. Market players indicate that the combination of high aluminium prices, limited increase in downstream construction and housing industry operating rates, and uncertainty over future orders has made downstream buyers cautious about buying. Market concerns over global liquidity and systemic risks increased in March due to the bankruptcy of Silicon Valley Bank and the credit turmoil of Credit Suisse Bank. As a result, Aluminium Sheet prices plunged in March, with Aluminium Sheet (3004-1 mm) prices for Ex Shanghai fixed at USD 2688/MT.
Europe
In the first quarter of 2023, the European Aluminium Sheet market experienced a downward trend due to softening demand and uncertainty about the region's economic outlook. According to the market players, the downstream buyers rushed to secure material in Q4 2022, fearing further price increases, which resulted in a more cautious approach to purchasing. The supply of Aluminium Sheets in the European market remains constrained due to a lack of Russian metal and reductions in domestic capacity. The bankruptcy of Silicon Valley Bank and Credit Suisse Bank's credit turmoil in March added to concerns about systemic risks and global liquidity issues, resulting in rising risk aversion and a battered commodity market. European aluminium production capacity has been reduced by up to half in the last two years due to skyrocketing power prices, and prices have yet to recover despite capacity cuts and falling power prices. As a ripple effect, Aluminium Sheet (2 mm-AW-2017A) prices for Ex Koblenz settled at USD 10657/MT.
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.
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.
