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Aluminum Outlook

Highlights

Aluminum prices have been rallying since mid-December and hit a record high aon continued robust demand and dwindling inventories, with the latest data showing LME warehouse inventories were at 742,200 tonnes, their lowest since 2007.

Australia’s announcement to ban exports of alumina and aluminium ores to Russia exacerbated fears of supply disruption of the lightweight meta

Australia supplies almost 20% of Russia’s alumina, the key ingredient for producing aluminum, and the move aims to inflict more economic pain for the Kremlin over its decision to invade Ukraine.

The demand for aluminium has soared globally while there is a supply deficit that may keep supporting aluminium prices in the near-to medium-term.

German aluminium maker Trimet will cut production at its main factory in the city of Essen by half in the coming weeks, CEO Philipp Schlueter told, citing huge costs for the energy-intense production process.

"Due to the further increase in energy prices as a result of the war in Ukraine, the situation has worsened dramatically. This is forcing us to make further adjustments," he was quoted as saying.

China's aluminium imports in the first two months of 2022 fell 26.2% from a year earlier, data from the General Administration of Customs showed.

Arrivals of unwrought aluminium and products – which include primary metal and unwrought, alloyed aluminium – totalled 336,007 tonnes in January and February combined, compared with 455,128 tonnes in the corresponding period last year.

China imported a record amount of the base metal in 2021 – 3.2 million tonnes – as higher prices of Shanghai aluminium versus international prices through most of 2021 made imports favorable.

In comparison, China's exports of unwrought aluminium and aluminium products rose 22% on an annual basis to 1.03 million tonnes in January-February.

Outlook: The demand for aluminum has soared globally while there is a supply deficit that may keep supporting aluminum prices in the near-to medium-term. Technically after a fall from 325.40 level to 262.15, currently prices are at very attractive level supported by fundamentals and technicals (given below) suggests to buy Aluminium in the range of 282-284 with stoploss placed below 268 for target 304 and above same can test 316 again.

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