Aluminum prices fluctuated sideways in May

Aluminum prices showed a "w" trend in May, with sideways fluctuations. According to the Commodity Market Analysis System of SunSirs, as of May 31, 2023, the average price of domestic aluminum ingots in the East China market was 18,290 RMB/ton, a decrease of 1.08% compared to the aluminum price of 18,490 RMB/ton at the beginning of the month (May 1).

In the long term, the price was still in the sideways range after falling from a high price, consistently fluctuating within the range of 17,500 to 19,500 RMB/ton.

Significant inventory reduction in the month

Inventory data: The social inventory of aluminum ingots decreased significantly in May. Inventory data showed that as of May 29th, the mainstream market of domestic electrolytic aluminum ingots had a social inventory of 573,000 tons, which was a reduction of 225,000 tons from the inventory of 798,000 tons on April 27th. As of April 24th, the social inventory of mainstream regions in China was 838,000 tons, which was a reduction of 485,000 tons compared to March 30th. As of May 31, the social inventory of aluminum ingots was at the lowest level in recent years.

Export situation

The latest data from the General Administration of Customs showed that from January to April 2023, China exported 13,000 tons of raw aluminum, a year-on-year decrease of 87.6%; Accumulated imports of 322,000 tons, a year-on-year increase of 145.3%. In April, the import of raw aluminum increased while the export decreased, mainly due to the Shanghai London ratio continuing to maintain a high level in April, and the aluminum price showing stronger internal and weaker external. In April, China imported 100,000 tons of raw aluminum, an increase of 38.7% month on month and 187.8% year on year. Among them, 89,000 tons were imported from Russia, accounting for 88.9%; Export of 4,000 tons, a decrease of 22.2% month on month and 87.2% year-on-year. Among them, the proportion of ordinary aluminum ingots exported under the trade mode of "logistics goods in customs special supervision areas" was 99.4%, a decrease of 22.4% month on month.

In terms of downstream aluminum materials: From January to April 2023, China's cumulative export of aluminum materials reached 1.743 million tons, a year-on-year decrease of 14.8%. Among them, 938,000 tons of aluminum strip and 452,000 tons of aluminum foil were exported, a year-on-year decrease of 24.1% and 4.2% respectively; The export of aluminum extruded materials reached 339,000 tons, a year-on-year increase of 4.5%. In April, China exported 438,000 tons of aluminum materials, a decrease of 6.7% month on month and 18.4% year-on-year; Among them, aluminum sheet and strip, aluminum foil, and aluminum extruded materials were exported to 228,000 tons, 114,000 tons, and 93,000 tons respectively, a decrease of 8.6%, 1.6%, and 7.7% compared to the previous month.

Domestic production slightly increased

Guizhou and Sichuan regions will continue to release production capacity for resumption of production, but the short-term changes are limited. The speed of resumption of production in Yunnan region will be limited by precipitation and water level changes, and there may be an increase in June.

Market outlook

From the perspective of the supply side, production increased steadily and slightly in May. Based on inventory data, there was 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 18,500 RMB/ton in the short term, and watching downstream consumption intensity in the near future.

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