Recently, smelters in Southwest China’s Yunnan and Guangxi, as well as Northwest China’s Qinghai, have gradually lifted their production after power supplies became ample, a Shanghai-based analyst remarked. “And some smelters in other regions have also actively commenced production on newly-installed smelting capacity, which together helped domestic aluminum supply gradually increase,” she said.
In fact, according to Mysteel’s latest data, China’s aluminum production in March reached 3.36 million tonnes, up 12.7% on month.
However, for the time being, sporadic COVID-19 outbreaks nationwide are still dampening demand for finished aluminum products, with truck transportation in affected areas still slow, other market sources noted. This in turn continues to hamper production among many local aluminum processors and fabricators and their procurement of raw materials, Mysteel noted.
By April 25, primary aluminum stocks at SHFE-licensed warehouses and in 16 Chinese cities monitored by Mysteel had eased to 1.05 million tonnes, down 1,000 tonnes or 0.1% on week.
Meanwhile, nonferrous prices overseas have slid in reaction to the strengthening US dollar. Market expectations are strong that the US Federal Reserve will lift the nation’s interest rates aggressively, a belief which also caused a ripple among domestic nonferrous prices including aluminum, Mysteel Global observed.
Consequently, as of April 25, China’s national price of 99.7% primary aluminum ingot under Mysteel’s assessment had dropped to Yuan 21,046/tonne ($3,212.7/t) including 13% VAT, down by Yuan 815/t or 3.7% from that on April 18.
Also on Tuesday, the most-traded aluminum contract on the Shanghai Futures Exchange for June delivery closed the daytime trading session at Yuan 20,700/t, also down Yuan 1,110/t from the settlement price on April 18, Mysteel Global noted.
Written by Victoria Zou, zyongjia@mysteel.com
This article has been published under an exchange agreement between MySteel Global and SteelMint.
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