SHANGHAI, Apr 21 (SMM) – Aluminium prices hovered at highs this week on the back of output cuts expectations and aluminium ingot inventory declines. As of Friday, A00 prices rose by 400 yuan/mt from a week earlier to 19,100 yuan/mt. Secondary aluminium alloy prices also rose slightly. As of Thursday, SMM ADC12 prices gained 150 yuan/mt to 19,400 yuan/mt.
In terms of cost, the prices of aluminium scrap rose rapidly during the week, and the production cost of secondary aluminium alloy remained high. Manufacturers are under great cost pressure, and the prices of ADC12 followed raw material costs up. In terms of demand, the consumption of automobiles has not improved and orders are sluggish. Aluminium prices climbed and downstream buyers continued to purchase as required. The overall transaction volume was low. Weak demand continued to restrain ADC12 prices from rising.
On the supply side, major secondary aluminium smelters maintain their production for existing orders, and their operating rates remained stable. Small and medium-sized factories have suffered reduced profits due to fewer orders, high costs, and price competition, thus their operating rates have declined. In the short term, operating rates of the secondary aluminium industry will fall in the near future. Imported ADC12 secondary aluminium alloy are still offered at $2,380-2,400/mt, with import losses of around 200 yuan/mt.
On the whole, due to rising costs and poor demand, the prices of ADC12 will continue to fluctuate within a narrow range in the short term.
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