Increased probability of sideways movement in aluminum prices

Aluminum price stops falling and stabilizes

According to data from Business News Agency, on March 29, 2023, the average price of domestic aluminum ingots in the East China market was 18603.33 yuan/ton, which was basically unchanged compared to the previous trading day, and the aluminum price was 18416.67 yuan/ton at the beginning of the month (March 1), up 1.01%. After recovering in January, aluminum prices fell in mid February. After the Federal Reserve raised interest rates in March, aluminum prices stopped falling and stabilized.

In the long term, the current price has retreated significantly, increasing by 6.61% compared to the recent recovery starting point (July 14, 2022), where the average market price of aluminum ingots was 17450 yuan/ton. The recent high aluminum price occurred on December 5th, with the average aluminum ingot market price of 19536.67 yuan/ton, a decrease of 4.78%.

Overview of fundamentals

In the early stage, the macro repression brought about by European and American banking industry eased, with nonferrous metals taking the lead in recovering, and aluminum prices stabilizing. At present, the overall transaction in the East China market has improved, and the circulation between traders is positive, and the transaction is fair; The aluminum price in Gongyi region is strong, and the willingness to receive goods from downstream is not strong, resulting in a strong wait-and-see mood; The spot downstream consumption in South China has rebounded, and the demand for replenishment has increased. The overall transaction is fair.

Aftermarket forecast

From the supply side, the output in March was not low, and according to inventory data, the social inventory of electrolytic aluminum is still relatively high, but there is a trend of destocking, and inventory destocking is slowing down. In the short term, electrolytic aluminum will be suppressed and alleviated by macro factors. It is expected that the aluminum price will stop falling and stabilize, and the probability of a sideways trend in the aluminum price will increase. In the near future, it is expected to wait and see the strength of downstream consumption.