SMM Analysis of Aluminium Market from Macro and Fundamentals Perspective

Published: Apr 10, 2023 17:55

Source: SMM

Save

SHANGHAI, Apr 10 (SMM) – On the macro front, the ADP employment report showed that the US private sector added 145,000 jobs in March, a sharp drop from 261,000 in February.

SHANGHAI, Apr 10 (SMM) – On the macro front, the ADP employment report showed that the US private sector added 145,000 jobs in March, a sharp drop from 261,000 in February. Initial jobless claims in the US dropped slightly to 228,000 in the week ending April 1. The number of Americans receiving benefits after an initial week of aid rose to 1.823 million in the week ending March 25, topping estimate of 1.699 million. A series of data pointed to growing risks of US economic recession. The US dollar index and US Treasury yields softened. The market is expecting the US Fed to pause interest rate hike in May. The macro environment in China is positive. Political leaders from South-east Asia and Europe paid a visit to China, and both sides expressed hope for strengthening cooperation and win-win in the future. Meanwhile, the acceleration of RMB internationalisation continued to boost market confidence.

In terms of fundamentals, aluminium smelters in Yunnan maintained stable production, while a few smelters in Guizhou and Guangxi increased production marginally. SMM statistics showed that China's aluminium output rose 2.9% YoY to 3.41 million mt in March. The share of molten aluminium output rose to 71% in March to meet growing demand from aluminium billet and alloy plants as their operating rates picked up. Lower aluminium ingot output will allow social inventories to extend declines. In downstream sectors, aluminium alloy segment performed poorly, while aluminium plate/sheet, strip and foil segments saw little change in their operating rates. Operating rates across wire & cable and extrusion segments maintained an upward trend. In particular, large wire and cable producers reported tight production schedules on the back of saturated orders, while extruders saw a significant increase in orders from construction and engineering industries. Aluminium ingot social inventories kept falling, while billet stocks accumulated due to enormous arrivals and poor demand.

Market Market

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

For any inquiries or for more information, please contact: lemonzhao@smm.cn

For more information on how to access our research reports, please contact:service.en@smm.cn

Related News

5 mins ago

China Aluminum Billet Supply: July Continued Its Inertial Uptrend; Expectations of a Retreat From Highs in August [SMM Analysis]

[SMM Analysis: China’s Aluminum Billet Supply: Continued Inertial Uptrend in July; Expectations of a Retreat from Highs in August] In July, the operating rate of aluminum billets rose 1.1 percentage points MoM to 58.3%, up sharply by 5.2 percentage points YoY. Benefiting from the strong performance of aluminum billet processing fees in Q2, China’s aluminum billet supply side continued its inertial uptrend in July, with the operating rate hitting a year-to-date high and also standing at a high level for the same period over the past three years. As the center of aluminum prices rebounded markedly from lows in July, downstream operating performance and purchase willingness were constrained, and adjustments on the aluminum billet supply side remained...

5 mins ago

8 hours ago

Indonesia’s 7.7-Magnitude Earthquake Had a Relatively Small Impact on the Aluminum Industry Chain, With the Shock Nearly Zero

SMM tracking feedback: The 7.7-magnitude earthquake on Flores Island, Indonesia, had a relatively small impact on the aluminum industry chain. In terms of capacity distribution, bauxite, alumina, and the vast majority of aluminum capacity are concentrated in western Indonesia, generally more than 1,400 km from the epicenter; even the closest aluminum smelter—Sulawesi Morowali Huachin Aluminum—was approximately 624 km away, still outside the 300 km damage radius. Coupled with a tsunami wave height of less than 0.4 meters, the actual supply shock was virtually zero. On the pricing front, it may at most show a short-term sentiment pulse of 0–1%, which is expected to be unwound within 1–3 days, without changing the medium-term trend.

8 hours ago

20 hours ago

Philippine DTI Plans Mandatory Certification for Aluminum Products Ensuring Quality and Safety Standards

According to Philippine media reports on the 12th, the Philippine Department of Trade and Industry (DTI) was planning to push for the establishment of a mandatory certification program for aluminum products that requires local and foreign manufacturing enterprises in the Philippines to obtain official Philippine quality and safety permits in advance and adopts a "one plant, one certificate" certification approach.

20 hours ago