Low iron aluminum ingots, strictly speaking, refer to aluminum ingots with 99.85 aluminum content and less than 0.1 iron content. With the evolution of trading, the low iron aluminum ingots now referred to in the market generally refer to aluminum ingots with iron content less than 0.1 and aluminum content more than 99.7. And we usually refer to the general aluminum, is simply refers to the aluminum content of 99.7 aluminum ingots, the common brands are its Asia, Yulin and Oriental Hope and so on.
In the course of observing the daily trading of aluminum ingots, SMM learned that the difference between the price of low-iron aluminum ingots and ordinary aluminum was between 200 and 350 yuan / ton at the peak, and was still higher than 50 to 80 yuan / ton at the beginning of this year, but the price difference has recently narrowed to between 0 and 20 yuan per ton.
Why does the price difference between low iron and aluminum ingots continue to narrow?
According to SMM, the recent growth in the supply of low-iron aluminum ingots in the market, and weak demand, forming a state of oversupply, holders in order to sell as soon as possible, often willing to sacrifice part of the profit, lower the price, or even sell at the price of general aluminum. As far as supply is concerned, SMM has learned from research that aluminum plants are in normal production, and weak demand is particularly pronounced.
Because of its superior extensibility, low-iron aluminum ingots are generally used in wheels, high-end electronic devices and other products, part of the production of A356 recycled alloy will also be used, the market is more narrow than ordinary aluminum. As the export trade environment becomes worse and related products enter the off-season of consumption, the consumer market for products such as wheels and recycled alloys is hardly optimistic, and the demand for related raw materials, including low-iron aluminum ingots, has also decreased. In a relatively small market, demand weakens further, and prices naturally fall.
SMM believes that the continuous narrowing of the price difference between low iron and aluminum ingots is the result of the natural adjustment of the market under the change of supply and demand, but considering that the wheel hub and recycled aluminum market is difficult to improve significantly in the past two months, SMM expects the price of low iron aluminum ingots to return to its peak in the short term.
(SMM Xu Man)
