SunSirs: Aluminum Prices Rebounded in May and Aluminum Ingot Fundamentals at a Glance

Aluminum prices rebounded in May. According to the commodity market analysis system of SunSirs, as of May 30, 2025, the average price of domestic aluminum ingots in East China was 20,303.33 RMB/ton, up 1.15% from the average market price of 20,073.33 RMB/ton on May 1.

Aluminum ingot fundamentals

1. Raw material: alumina

Supply: The Guinean government has withdrawn some mining licenses, and Axis mining areas and other mines have stopped production, involving a production capacity of about 40 million tons/year. Although domestic bauxite inventories are high and supply has not been seriously affected in the short term, it has caused market concerns about raw material supply.

Domestically, alumina production increased by 8.7% year-on-year from January to April 2025, but production in April fell by 11.3% month-on-month. Last week, the total operating capacity fell by 2.9 million tons month-on-month, and the operating rate was adjusted down to 77.02%. However, as profits are restored, some of the suspended production capacity has plans to resume production.

Demand: Domestic alumina demand is generally stable. Although May is the traditional off-season for aluminum consumption, the operating rate of electrolytic aluminum enterprises remains high due to high profits, which supports the demand for alumina. Export demand weakened marginally. In April, China's alumina exports increased by 101.6% year-on-year, but the import and export window has been closed for the past two months.

Cost: Bauxite prices fell, processing fees rose, caustic soda prices also weakened, and alumina production costs fell. As of May 22, the average full cost of the alumina industry in May was 2,850 RMB/ton, down 230 RMB/ton from April, and the industry's profit turned from negative to positive, with an average profit of 106 RMB/ton.

Price: Since May, domestic alumina spot prices have continued to rise. As of May 29, alumina spot prices reached 3,294.4 RMB/ton, up 14.43% from the previous month.

2. Aluminum ingot supply side:

The fundamentals of aluminum ingot supply side in May showed the characteristics of operating capacity growth but limited, expected increase in output, imports maintained a certain scale, and continuous inventory reduction. In May, the operating capacity of domestic electrolytic aluminum increased slightly, mainly due to the resumption of production of some enterprises in Guizhou and Sichuan. It is roughly estimated that the operating capacity of domestic electrolytic aluminum in May was restored to around 40.92 million tons, and the output is expected to increase by 1% year-on-year to around 3.47 million tons. From January to April, domestic electrolytic aluminum maintained a net import status, and the net import of aluminum ingots in April was close to 100,000 tons. The weak state of overseas aluminum demand continued, and it is expected that domestic raw aluminum may still maintain a certain net import scale in the future.

3. Mainstream social inventory:

Continued inventory reduction: As of May 26, the mainstream social inventory of domestic aluminum ingots was 534,000 tons, far lower than 643,000 tons in mid-May and 774,000 tons at the end of April, and was in a continuous destocking trend. The decline in inventory is due to the start of downstream enterprises' demand for replenishment, and on the other hand, the transportation capacity in Xinjiang is tight and the shipment of aluminum ingots is not good, resulting in a decrease in arrival and storage.

4. Demand for aluminum ingots:

In May, the demand for aluminum ingots showed overall support but structural differentiation. The demand in the new energy field and export performed well, while the demand in the traditional field was relatively weak.

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