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Aluminium

Aluminium on major commodity futures markets extended weakness in previous week on worries of demand destruction from top consumer China due to Covid-19 led lockdowns. While monetary policy tightening measures from major central banks and surging US Dollar dampened the price sentiments.

• China’s aluminum production in March rose 1.8% from a year earlier, official data showed, increasing to the highest since May 2021.

Aluminium in Shanghai future platform at its lowest level in 2022 Aluminium prices remained under pressure on major platforms as slowing manufacturing activities in major economies mainly in China as ongoing lockdown measures impacted the factory activities. Meanwhile prospects of aggressive scaling back of monetary measures from US Central bank and speedy rate hikes helped the US dollar to surge to two decade high which led the investors to restrict themselves from fresh positions as industrial metals became more expensive.

Factory activities of major economies US and Eurozone slowed, while China factory activity shrank at the sharpest pace in 26 months in April. At the same time mounting sanctions on Russia by western countries has disrupted the air and sea shipments of metal produced and exported by Russia, which produced around 6% of world’s aluminium. On the other hand Russia continued to increase alumina (an aluminium containing compound) imports from China after shipments from key suppliers Ukraine and Australian have halted their shipments. While European aluminium premiums remained at higher levels as premiums across the region steadied of severe logistical issues. While premiums in US Japan and Brazil unchanged last week despite fall in prices.

Prices of aluminium on Shanghai futures platform slipped to lowest level in 2022 and finally settled at 19970 CNY/MT. MCX aluminium prices declined to three month low in previous week and rested below Rs 240 kilogram. Benchmark aluminium prices in London Metal Exchange slipped to three month low last week by shedding nearing to 7.00 percent.

China’s aluminium exports up by 29% yoy during Jan-Apr China exported 2.23 million tonnes of aluminum in the first four months of 2022. The country exported 596,863 tonnes of unwrought aluminium and products last month, almost unchanged from the prior month.

Warehouse stock level

The aluminium inventory levels in LME registered warehouses decreased last week by 5850 MT and totalled 571800 MT. The inventory level in SHFE registered warehouses added last week by 4996 MT and totalled at 295137 MT.

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