First Quarter of 2023 in Europe Aluminium Wire Prices
North America
The Aluminium
Wire Prices in the US market rose in the first quarter of 2023 due to
increased premium costs amid financial market turmoil. Market players noted
that this trend began after a series of smelter curtailments last year and was
further fueled by sustained supply issues and rising demand expectations
surrounding China's return to the market. Market participants claimed that US
premiums were rising to attract more metal, and Western market premiums for
aluminium ingots also increased due to speculation of rising Chinese demand.
However, the collapse of two US banks and market uncertainty contributed to the
first drop in the US Midwest aluminium premium since mid-February. Despite
this, market players remained unconcerned about oversupply, as downstream
demand was in its peak season, and stockpiles of Aluminium Wire had
significantly decreased, despite increased domestic supply and imported
inflows.
In Q1 2023, Aluminium Wire prices
in China were sluggish due to high inventory levels and low buyer sentiment.
Raw material aluminium ingots fell four consecutive times in January before
rebounding. The social inventory of aluminium had exceeded expectations,
suppressing prices. Downstream demand had been delayed, leading to stable supply
and high inventory levels. In early February, prices had been rangebound with
no new lows or highs. Aluminium Wire prices had been stable, with improving
downstream demand. Inventories had plateaued, and traders had awaited the start
of the destocking process. The Federal Reserve's hawkish statements had
pressured nonferrous metals prices. Operating rates and sales had increased
month over month as peak season approached. Aluminium Wire inventories had
increased as the tight supply of aluminium scrap had eased in March. Traders
had picked up goods aggressively while delivering cautiously. According to
manufacturers, several domestic smelters had resumed production, causing
Aluminium Wire prices to edge downward in the Chinese market.
Europe
In Q1 2023, European Aluminium
Wire prices experienced a notable increase due to mounting premium costs over
raw material Aluminium
Sheet prices amid a lack of demand in the electrical power transmission
sector. Raw material Aluminium premiums had surged by roughly 16% since the
beginning of the year. Despite ample inventories of Aluminium Wire in the spot
market, premiums remained high due to elevated production charges. Freight
prices had declined, and the European market had faced no significant
competition from the Asian market. However, the spot market experienced weak
demand for Aluminium Wire in Q1, even from reliable end-users. Energy prices
had decreased and hovered at a moderate level. Despite this, there had been
further cutbacks in the domestic market, indicating a shift of primary
production to Asia. Aluminium stock levels in exchange warehouses had surged
due to companies like Glencore delivering Russian metal that could not be sold
to end-users. Despite low demand, European Aluminium Wire prices had remained
higher than other regions, attracting tonnages from overseas market players
despite eased overseas Aluminium Wire prices and a closed arbitrage window in
China.
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