Volatile aluminium prices lead to cautious downstream purchases in east China; Alumina price shrinks

According to Shanghai Metals Market, downstream consumers of primary aluminium remained cautious in making purchases across east-China markets on Thursday, November 22, given the recent volatility in prices.

The SHFE 1812 contract inched up in the morning trade while spot discounts in Shanghai narrowed down to RMB 40 per tonne to RMB 30 per tonne against the SHFE contract, from RMB 50 per tonne to RMB 40 per tonne in the previous day.

In Shanghai and Wuxi, most transactions were seen at RMB 13,740 per tonne to RMB 13,760 per tonne and that in Hangzhou at RMB 13,760 per tonne to RMB 13,780 per tonne, SMM found.

Across eastern markets, sellers remained keen to offload cargoes. But purchasing enthusiasm was missing among traders because of the narrowed backwardation structure between the December and January contracts. Hence, overall trades across the markets stood poor than the previous day.

However, the A00 aluminium ingot spot price showed a further rise today, on November 23, from RMB 13,760 per tonne to RMB 13,840 per tonne. The average prices are expected to range between RMB13,820 per tonne and RMB 13,860 per tonne, with spot discounts to settle at RMB 50 per tonne to RMB 10 per tonne.

All the major Chinese markets also recorded a hike today in aluminium ingot prices. The markets in the east and south stood the highest among all, by recording a growth of RMB 70 per tonne. With that hike, the ingot price in the east market clocked at RMB 13,820 per tonne and the south RMB 13,900 per tonne. In the north, the ingot price increased by RMB 65 per tonne to stand at RMB 13,820 per tonne.

The alumina spot price, on the other hand, plunged today by RMB 39 per tonne, after a few rises through the month. On November 1, 2 and 5, the alumina spot price had shown back-to-back rises from RMB 3107 per tonne to RMB 3127 per tonne and to RMB 3143 per tonne and to RMB 3170 per tonne. After showing a restraint for a day, the price again recorded a hike to RMB 3179 per tonne and to RMB 3182 per tonne on November 7 and 8. The next price rise was on 13th of November to RMB 3184 per tonne and thereafter showed restraint until a drop today, November 23, to RMB 3145 per tonne.

Australian alumina FOB price, however, stayed unchanged today at US$ 400 per tonne.

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