Aluminium Alloy Ingot Prices Trend and Forecast

North America

In the US market, the Aluminium Alloy Ingot prices showcased a mixed trend in the fourth quarter of 2022 amidst shortages of containers and labor. In October and November, rising premium costs provoked the Aluminium Alloy Ingot prices to surge due to transportation bottlenecks caused by a lack of containers, shippers, and truck drivers, as well as long wait times at ports and other transportation hubs. Domestic market participants were most concerned about European production curtailment and their potential spillover effects on the US market. In December, Aluminium Alloy Ingot prices fell by more than 1.4% as the market began to slow down in preparation for the Thanksgiving holiday. Some producers reduced their offers. Manufacturers witnessed limited profit margins due to the rising COVID-19 cases in China and expectations of a surplus supply next year. Alcoa and other manufacturers had warned that high energy and raw material costs and a drop in aluminium prices put pressure on margins. As a result, the price of aluminium alloy ingot (A383) for Ex Alabama settled at USD 3720/MT during the final week of the quarter.

Asia Pacific

In the Chinese market, the Aluminium Alloy Ingot prices showcased a rising trend in the fourth quarter of 2022, owing to the steady supply and demand outlook. According to market participants, the lower inventory level boosted the price of aluminum in October. Furthermore, the pandemic has hampered transportation. The operating rates of downstream plants in Henan had fallen due to pandemic controls, and the demand outlook in east China was also pessimistic as the traditional off-season approached. On the demand side, November and December witnessed low downstream consumption. Some aluminum processing plants closed early to celebrate the Chinese New Year. Premiums in Gongyi fell due to a drop in terminal demand and orders. Spot premiums remained high due to a lack of supply in the spot market and traders' refusal to sell. Furthermore, the downstream processing industry had reached a seasonal low with weak downstream consumption in December. Thus, the Aluminium Ingot (ADC 12) prices for ex-Shanghai and FOB Shanghai settled at USD 2650/MT and USD 2700/MT during the last week of Q4 2022.

Europe

In the fourth quarter of 2022, the Aluminium Ingot prices showcased a stagnancy in the price trend in the European market amidst soaring energy costs, significant production curtailments, and weakening downstream demand. Aluminum manufacturers claimed that the situation was dire; production had been reduced by nearly 50%. Major production curtailments such as Hydro's Karmy and Hydro Husnes aluminum plants in Norway were due to low demand. Despite the uncertainty and concerns about rising energy prices, there was a slight panic in the European market. Buyers were well-stocked, and falling end-user demand drove the European aluminum market. According to market participants, there were no concerns about supply for the first quarter of 2023, as players had excess inventory and orders that had already been delayed until 2023. Some restocking of Aluminium Alloy Ingot occurred in the market due to low end-user inventory levels amid bearish sentiment. Prominent buyers curtailed their usual activities to wait until the first or second week of January. As a result, the aluminium alloy ingot (A380) discussions for Ex Willich and FOB Hamburg settled at USD 3238/MT and USD 3300/MT, respectively.

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