Aluminum prices slightly rebounded at the end of the month

According to the Commodity Market Analysis System of Business Society, the average price of aluminum ingots in the East China market on February 29, 2024 was 18876.67 yuan/ton. Aluminum prices have steadily increased this week, up 160 yuan/ton from Monday’s market average price of 18716.67 yuan/ton, with a weekly increase of 0.85%.

Based on monthly data, the current price is close to the pre holiday (February 8th) aluminum price of 18860 yuan/ton%. In the long term, the current price is in the “M” type price state since the second half of 2023, and the price level has been in the upper middle level in the past year.

Overview of fundamentals this week

Supply side influencing factors

On the news side, the power outage incident at an aluminum plant in Inner Mongolia may affect production capacity, and actual production changes are limited; In the southwest direction, Yunnan has good precipitation, and the hydroelectric power generation may drive the resumption of a small amount of electrolytic aluminum production capacity in March. Yunnan’s early production reduction has been basically completed, and the risk of subsequent production reduction is relatively small. It is expected that Yunnan’s production will steadily increase slightly before the rainy season, with little variation.

Demand side influencing factors

After the Yuanxiao (Filled round balls made of glutinous rice-flour for Lantern Festival), the downstream consumption gradually recovered, the auto and photovoltaic sectors started to work fairly well, and the construction sector started to recover at a low rate recently. The overall demand has improved.

Future Market Forecast

The traditional peak season for consumption is approaching, and downstream demand may improve. The production capacity and operating rate of aluminum profiles, aluminum cables, aluminum plates and strips, aluminum foils, primary aluminum alloys, and recycled aluminum alloys are gradually recovering with the resumption of production and work. The future spot trading is expected to improve from the current light trend. It is expected that aluminum prices will experience strong fluctuations in the short term.