The high price of aluminum fell back

According to the Commodity Market Analysis System of SunSirs, on April 25, 2023, the average price of domestic aluminum ingots in the East China market was 18,843.33 RMB/ton, a daily increase of 0.37%, and an increase of 0.89% compared to the aluminum price of 18,676.67 RMB/ton at the beginning of the month (April 1).

In the long run, after the high price fell, it has been fluctuating sideways within the range of 17,500 to 19,500 RMB/ton. In mid April, aluminum prices improved, breaking through 19,000 RMB/ton within the month, and starting to decline this week.

Overview of recent market trends and motivations

The insufficient precipitation in the southwest and northwest has triggered a trend of reduced production of electrolytic aluminum, driving up the early aluminum price market. Recently, the hype has been released, and the high aluminum price has slightly declined.

Supply and demand fundamentals

Supply side: Electrolytic aluminum production was slowly resuming in Guizhou, Sichuan, while new production capacity was released in Gansu Zhongrui and Baiyinhua. The drought in the southwestern region was intensifying, and attention was being paid to the trend of another reduction in production of electrolytic aluminum.

On the demand side: Downstream processing enterprises have a stable preference for operating conditions, and overall demand is expected to be positive, but the range is limited.

Inventory data: The significant decline in domestic inventory is mainly due to the increase in the proportion of aluminum to water, leading to a decrease in ingot production. At the same time, the maintenance of Xinjiang's outbound railways has affected the shipment volume. Data shows that as of April 24th, the social inventory of mainstream regions in China was 838,000 tons, which was down 220,000 tons compared to March 30th.

Market outlook

From the supply side perspective, production remained stable in April, and inventory data showed a clear trend of inventory depletion in the electrolytic aluminum industry. The main game point currently lies in the actual supply and demand changes in the later stage. It is expected that aluminum prices will mainly fluctuate around 18,800 RMB/ton in the short term, watching downstream consumption intensity in the near future

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