Aluminum prices slightly declined in January

According to the Commodity Market Analysis System of SunSirs, the average price of domestic aluminum ingots in the East China market on January 18, 2024 was 19m013.33 RMB/ton, a decrease of 3.54% compared to the aluminum price of 19,563.33 RMB/ton at the beginning of the month (January 1).

In the long term, as of January 18th, the price was in the "M" type price state since the second half of 2023, and the price level had been in the upper middle level in the past year.

The driving force of alumina cost declined

In the early stage, the supply of bauxite was relatively scarce. The heavy pollution weather range of Guinea's aluminum mine, along with the Beijing, Tianjin, Hebei region and surrounding areas, was from December 22, 2023 to January 4, 2024. In some areas, due to weather difficulties and transportation difficulties, the supply of goods was tight, and alumina may continue to provide support for the cost of electrolytic aluminum.

With the improvement of air conditions in most of the main production areas of bauxite and alumina in the north, enterprises were gradually resuming production. As of January 18th, the rise in spot prices of alumina nationwide was slowing down, and prices began to loosen in January. The cost side of alumina was supported, but the momentum was beginning to decline on the emotional side.

Inventory was low, aluminum prices had support at the bottom

Social inventory was at an absolute low level. As of January 18th, the mainstream social inventory of electrolytic aluminum ingots in China was 421,000 tons, compared to 446,000 tons on January 2nd, and 250,000 tons were destocked. Based on year-on-year data, it was at a low level in the same period of nearly seven years. However, in terms of trend, we were in a low consumption season, and aluminum processing enterprises were gradually entering the Spring Festival holiday state in mid January. Orders were further decreasing, and there is an expectation of significant accumulation of aluminum social inventory in the future.

In the future, it may fluctuate and operate on the front line of 19,000 RMB/ton

As of the 18th, aluminum prices had fallen to the level of 19,000RMB/ton, and it is expected that the downward space will begin to narrow. In the future, it is necessary to focus on whether inventory growth exceeds expectations.

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