Aluminum prices slightly rebounded in December

According to the Commodity Market Analysis System of Business Society, the average price of aluminum ingots in the East China market on December 29, 2023 was 19593.33 yuan/ton, an increase of 4.93% compared to the aluminum price of 18673.33 yuan/ton at the beginning of the month (December 1).

In the long run, the current price is at a high level in the range of sideways fluctuations. Since May, it has been fluctuating below 19000 yuan/ton, and by the end of August, it has exceeded 19000 yuan/ton. In September, aluminum prices first fell and then rose. In October, the center of gravity of aluminum prices fell back to around 19000 yuan/ton and fluctuated. In November, aluminum prices were weak and began to recover after mid December, standing above 19000 yuan/ton.

Observing downstream demand in the future market

In the short term, the supply of bauxite is relatively scarce. In addition, the heavy pollution weather range in the Beijing Tianjin Hebei and surrounding areas is from December 22, 2023 to January 4, 2024, and some areas may continue to support the cost of electrolytic aluminum due to weather difficulties and transportation difficulties, resulting in tight supply of goods.

The bearish factor lies in downstream consumption. The operating rate of downstream processing enterprises in the Central Plains region is expected to decrease. Recently, processing enterprises in Henan Province have experienced a decline in production due to environmental control measures. The mainstream consumer area in Henan is facing production restrictions due to environmental protection, and coupled with the off-season of consumption, there is an expectation of significant accumulation of aluminum inventory in the future. Fortunately, according to the data from the social inventory, it is in a low inventory state. As of December 25th, the mainstream social inventory of electrolytic aluminum ingots in China was 414000 tons, with 149000 tons of inventory removed compared to November 30th. Based on year-on-year data, it is at a low level in the same period of nearly five years.

Future market forecast

The strong price of alumina may continue, and cost support may strengthen. But currently, aluminum prices are also rising rapidly, digesting some of the positive news; Gradually entering the downstream consumption off-season, fortunately, the current social inventory of aluminum ingots remains low, providing some support for aluminum prices, but the upward space is narrowing.