Price trend

According to the data of SunSirs, the average price of the domestic aluminum ingot market in East China on June 16 was 20,170 RMB/ton, a daily increase of 0.43%, compared with the market average price of 20,206.67 RMB/ton at the beginning of the month (6.1), a decrease of 0.18%, compared with the market average price of 18,800 RMB/ton at the same period last year, an increase of 7%.

Taking the peak in 2021 (October 19, 2021), the average market price of aluminum ingots was 24,240 RMB/ton, and the recent deviation from the peak has dropped by 16.79%. Starting from the recent recovery (December 13, 2021), the average market price of aluminum ingots was 18,693.33 RMB/ton, a recent increase of 7.90%.

Introduction to the Fundamentals of Aluminum Ingots in June

1. The destocking of aluminum ingot social inventory is accelerated.

As of the 16th, the social inventory of aluminum ingots in major regions was 808,000 tons, down 102,000 tons from the 910,000 tons at the beginning of the month.

2. Domestic aluminum production data

In May, the added value of non-ferrous metal smelting and rolling processing industry increased by 3.4% year-on-year, and the cumulative value added from January to May increased by 3.9% year-on-year; the output of ten non-ferrous metals in May was 5.64 million tons, an increase of 3.3% year-on-year. The cumulative output from January to May was 27.25 million tons, a year-on-year increase of 0.9%. Among them, the output of electrolytic aluminum in May was 3.42 million tons, a year-on-year increase of 3.1%. The production of electrolytic aluminum from January to May was 16.4 million tons, a year-on-year increase of 0.3%.

3. Macro policy news

In June, the FOMC announced a 75 basis point interest rate hike, raising the target range for the federal funds rate to 1.5% to 1.75%, and it is expected that it will be appropriate to continue to raise the target range. This was the largest rate in nearly three decades since 1994, with the rate hike to pre-pandemic highs in March 2020. At the same time, the Fed decided that the committee will continue to reduce its holdings of US Treasury bonds, agency bonds and agency mortgage-backed securities.

Market outlook

The interest rate hike news was negative for the non-ferrous metal market, the previous news was basically digested, and the non-ferrous metal prices began to bottom out after the negative realization.

Domestic transportation conditions have gradually improved, market circulation has begun to return to normal, and downstream consumer demand has an upward momentum. The spot trading of the three mainstream consumer destinations in Foshan, Wuxi, and Gongyi has risen, and the willingness of downstream to replenish storage is increasing. It is expected that the price of aluminum ingots will run strongly in the short term.

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