aluminium demand supply

The demand shock to companies dependent on aluminum cans is hard to overstate, according to Molson Coors. 2021 PREVIEW: Demand growth to support SHFE aluminium price in H1 but surplus weighs There is a growing tendency by major aluminium processors to use higher amounts of recycled aluminium for making their products. The pandemic brought on substantial growth in single-serving consumption of carbonated beverages. The latest move brings the billet premium to an all-time low. "We sold 300 million more cans of beer in the first nine months of 2020 than we did in the same period in 2019 in the United States alone. The slowdown in key sectors such as the European car industry is putting the aluminum industry on course for annual demand growth of 1% to 2% this year, according to Wood Mackenzie. Mostar signed a five-year deal this week with British-Swiss firm Glencore plc for the supply... Russian Federation aluminium giant UC Rusal announced yesterday that it has received an A- rating in its first-ever assessment by... Base metals prices reacted positively to the progress registered in the latest round of US – China trade talks in mid-October, but the markets remained cautious about the prospects for a final agreement. Get quick access to tools and premium content, or customize a portfolio and set alerts to follow the market. However, the latest forecasts indicate that the demand growth for aluminium will be between 0 and 1% y/y, while CRU Group predicts the market to shift into surplus in the fourth quarter with 185,000 tonnes, after deficits of 1.286 million tonnes in the second quarter and 467,000 tones in the third quarter. World primary aluminium production fell in September to 5.163 million tonnes, down 2.6% year-on-year and 3.12% on the month, according to the latest data from the International Aluminium Institute (IAI). The current aluminium price “is just high enough above cost of production” to allow smelters to launch or resume operations after shutdowns, AZ China’s Adkins said. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this. The premium for aluminium billets in Europe is holding onto the US$ 300 per tonne level, while in the United States, it fell to a record low on October 25, reflecting billet producers’ continued struggle to sell spot billets to extruders. Parallel with new types of alloys new techniques of material shaping/designing are established and used. Any slowdown in China could create a global supply glut that could depress prices, especially in Europe and Japan. The latest economic parameters in the EU and the US also indicate slowing growth. The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. While the points above speak to demand (or lack thereof) for aluminium, the scale of the COVID-19 pandemic is broad enough to impact supply as well. The aluminium industry is facing a huge supply glut that could trigger thousands of jobs losses as the coronavirus pandemic forces key customers to halt production. Search our directory for a broker that fits your needs. Primary production decreased 2.2 percent from 2014 to 9.8 billion pounds. In the long term, underlying demand-supply dynamics tend to impact metal prices. This apparent stability might reflect the growing diversification of the Chinese economy into services but nevertheless we think that it understates the true degree of volatility in China’s industrial sector. Aluminium demand, however, drives alumina and bauxite growth – medium to long term demand … Many forms of alloy are made by blending in … Supply and demand balance Market to remain very tight, with estimated 455Kt global deficit Tradable commodity grade production to fall as producers increase VAP output Tight primary/secondary spreads to continue to underpin the demand for primary aluminium Attractiveness of “cash and carry” deals On the Multi Commodity Exchange, aluminium for delivery in July contracts eased by 25 paise, or 0.18 per cent, to Rs 136.50 per kg in a business turnover of 810 lots. Steel production also increased in an annual comparison but, despite this, inventories at warehouses have been steadily going down since early October, indicating strong demand through the whole of the supply chain, although stocks increased slightly in late … Various aluminium alloys, all kinds and generations of advanced high strength steels, then magnesium, composite materials (carbon fiber) and various plastic materials are the main to be used in automobiles to achieve that goal. World primary aluminium production fell in September to 5.163 million tonnes, down 2.6% year-on-year and 3.12% on the month, according to the latest data from the International Aluminium Institute (IAI). Production cuts in China and falling inventories indicating market deficits and seasonally higher demand towards the end of the year, did not manage to boost LME prices. The global market is due to flip into a surplus of 304,000 tonnes next year from a deficit of 658,500 tonnes in 2019, according to the consensus numbers. Aluminium and other base metals prices are expected to be capped next year as weak economic growth weighs on the market, the latest Reuters poll showed (Oct. 28). Norsk Hydro predicts demand outside China will fall by 1-2%, meaning that global demand is likely to fall by 0.5%. Demand for aluminium in North America improved by 5.6% in comparison with 2014. Lightening of vehicles must b… Understand how CME Group can help you navigate new initial margin regulatory and reporting requirements. In the Middle East, primary aluminium production increased by 4.35% year-on-year to 456,000 tonnes last month. This would not necessarily have much of an impact on the U.S. premium for aluminum, but it could depress European and Japanese prices further should a global aluminum glut develop. It appears that the U.S. tariff will reduce the quantity of aluminum used in the United States, resulting in a small but measurable supply glut in Europe and Asia. U.S. tariffs have raised U.S. aluminum prices but may be lowering prices elsewhere. Per Paul Adkins, managing director of AZ China, the Xinfa and Hongqiao incidents took about 1,300 tonnes a day from the market. The views in this report reflect solely those of the author(s) and not necessarily those of CME Group or its affiliated institutions. China will import alloyed aluminium ingots (produced from secondary aluminium) from Europe and elsewhere instead of scrap and may increase exports of semi-finished aluminium products, at higher value and prices than alloyed ingots, while reducing the same (conversion) business in Europe and elsewhere. Access real-time data, charts, analytics and news from anywhere at anytime. In the first nine months of 2019, China produced 26.37 million tonnes of aluminium, up 1.1% from a year earlier. Adkins also said this had been partly offset by the restart of China Zhongwang Holdings’ smelter in the north eastern province of Liaoning and a capacity addition by Xinfa in Guangxi in China’s south. Any slowdown in China could create a global supply glut that could depress prices, especially in Europe and Japan. Casting Alloy Aluminum Wheel Market Value Share, Supply Demand, share and Value Chain 2020-2027 December 10, 2020 sagar The global Casting Alloy Aluminum Wheel market is anticipated to rise at a considerable rate during the forecast period, between 2020 to 2027. Like copper, iron ore and other industrial metals, aluminum prices closely track Chinese economic growth. However, should the U.S. apply tariffs to a wider set of goods or increase the tariffs from 10% to 25%, the economic impact on China will start to be measurable. Any slowing in the Chinese economy will make it harder to absorb the vast amount of aluminum being mined each year. He is responsible for generating economic analysis on global financial markets by identifying emerging trends, evaluating economic factors and forecasting their impact on CME Group and the company’s business strategy, and upon those who trade in its various markets. China’s gross domestic product growth slowed to 6.0% year-on-year in the third quarter, its weakest pace in almost three decades. The Shanghai Futures Exchange aluminium price will maintain its upward momentum in the first half of 2021 due to strong demand before trending gradually lower in the second half of the year on increased supply, market participants and analysts told Fastmarkets. In the July poll, analysts had expected a deficit of 88,000 tonnes next year. New Delhi: Aluminium prices on Monday softened by 0.18 per cent to Rs 136.50 per kg in futures trade as speculators cut bets amid subdued demand in spot market. As well as a five-year view, we also provide a 25-year forecast for aluminium supply, demand and prices. Alcoa took a similarly pessimistic view. Compared to earlier polls, analysts significantly lowered their forecasts for the average aluminium price next year. Among key findings for the North American industry, the report found that in 2015: Demand for aluminum (producer net shipments and imports) increased by eight-tenths of one percent to 25.7 billion pounds. The company is comprised of four Designated Contract Markets (DCMs). This is true of both China’s official GDP as well as a more volatile alternative measure called the Li Keqiang index, which measures growth in electricity consumption, rail freight volumes and outstanding bank loans (Figure 2). China consumes 40-50% of the global aluminum supply each year. Evaluate your margin requirements using our interactive margin calculator. While tariffs have a direct impact upon regional pricing, especially in North America, they could also have indirect consequences for aluminum prices generally. “With primary aluminum demand expected to fall 13% in the U.S. in 2020, a response from one of the major producers was what the market needed,” said Doug Hilderhoff, an analyst at CRU Group. The main downside risk to U.S. aluminum prices could be a sudden removal of tariffs. U.S. aluminum prices soared between January and April in anticipation of the Administration’s 10% import tariff. ET The reason for this is a well – or otherwise – oversupplied market, slowing global growth and exhaustion from the prolonged US-China trade negotiations. At the same time, there are no reliable and accurate statistics on how much new scrap goes back into the production process over closed-loop schemes, or how much old scrap has replaced orders of primary aluminium. Press Release Europe Aluminum Market Demand and Supply, Production Analysis and Opportunity Assessment 2020 to 2025 Published: July 26, 2020 at 9:00 a.m. Don't miss a single update from Aluminium Insider. All examples in this report are hypothetical interpretations of situations and are used for explanation purposes only. In the U.S., the substitution of aluminum for steel in car manufacturing, such as Ford's F-150 model, will be positive for demand. Understand how the bond market moved back to its normal trading range, despite historic levels of volatility. Demand from flat steel users has been particularly strong - for example, refrigerator production rose by 25.8% year-on-year. Material demand and supply are broadly linked to energy, water, and climate change. The reason why China matters so much to aluminum is simple. Other than nickel and lead, base metal prices have been trading lower this year, with aluminium the second worst performer, and tin last. By continuing to use the site, you agree to the use of cookies. “The current demand downturn has the misfortune of being timed with the start of the strongest period for ex-China supply growth since the late 1990s,” said analyst Nicholas Snowdon at Deutsche Bank in London. Erik Norland is Executive Director and Senior Economist of CME Group. The London Metal Exchange index of six base metals inched up only 1% so far this year, held back by worries about a possible global recession and the trade war. Aluminium prices will see only modest growth in 2020 as the market moves into surplus, hit by a combination of a slowing demand growth and continued gains in supply. While Americans have to pay higher prices as a result of the tariff, premiums paid in Europe and Japan have fallen slightly. After remaining elevated, in the range of $1,850 per metric ton to $1,950 per metric ton, aluminum prices decreased in the second half of 2019, to reach close to … Stream live futures and options market data directly from CME Group. This report and the information herein should not be considered investment advice or the results of actual market experience. Create a CMEGroup.com Account: More features, more insights. Total exports of unwrought aluminum, including primary metal, alloy and semis, were 5.8 million tonnes last year, up 21 percent on 2017. Hear from active traders about their experience adding CME Group futures and options on futures to their portfolio. Since the tariff went into effect on June 1, forward-pricing has been stable, indicating that few investors anticipate an end to the tariff policy in the short term (Figure 1). The Aluminium Futures (CFD Derived) rose despite the global uncertainties amid supply shortfall; the prices of Aluminium Futures surged from the level of US$1749.75 (Day’s low on 21st June 2019) to the present high of US$1803.25 (as on 25th June 2019 2:10 PM AEST). As such, when it comes to aluminum, we would be inclined to pay more attention to the Li Keqiang measure of growth than to official Chinese GDP. Australian mineral exploration firm Lindian Resources Limited obtained the Guinean government’s sign-off to take title to 61 percent of the... Bosnian aluminium smelter Aluminij d.d. All things considered, this is the real reason why primary aluminium demand fell so quickly. Chinese demand will be critical for the future direction of aluminum prices globally. Protect your portfolio with Metals futures and options. Chinese demand will be critical for the future direction of aluminum prices globally. Shanghai aluminium prices are currently hovering around the 14,000 yuan ($1,980) a tonne mark often considered a break-even price for Chinese smelters, while spot aluminium premiums exceeded 100 yuan/t. Production amounted to 47.549 million tonnes in the first nine months of 2019, dropping 0.99% from 48.023 million tonnes in the first nine months of 2018. Lindian Gets Guinean Government Go Ahead For Purchase Of 61 Percent Of Woula Bauxite Project, Aluminij Mostar Inks Aluminium Billet Offtake Agreement With Glencore, Rusal Earns A- Rating From Carbon Disclosure Product In First-Ever Evaluation. Within the BRIC economies, the growth of Indian demand has been a key contributor to growth. The Li Keqiang index correlates aluminum prices at between 0.5 and 0.6 up to five quarters in advance (Figure 3). The latter remains the main contributor to depressed markets and metal prices. The daily average output still managed to climb to 96,700 tonnes per day in September, according to Reuters calculations, up from about 95,900 tonnes per day in August, which has one more day. The main downside risk to U.S. aluminum prices could be a sudden removal of tariffs. In the first half of 2015, global aluminium demand rose by 6.3% to 28.6 million tonnes as a result of stronger demand in North America and the EU. CME Group is the world's leading and most diverse derivatives marketplace. Now, they are almost 20% higher. For aluminum prices, industrial demand is what counts. Production of primary aluminium stood at 4.109 million tonnes in the first nine months of this year. China’s estimated primary aluminium production stood at 2.878 million tonnes in September, a decline of 3.2% y/y, IAI data further showed. Despite many contradictory estimates and forecasts, the consensus among all major producers is that global aluminium demand growth will be flat (around zero) this year. Bauxite Supply and Demand Fundamentals The aluminium industry is no longer as integrated as it used to be – pricing power is shifting upstream to alumina and bauxite producers. Further information on each exchange's rules and product listings can be found by clicking on the links to CME, CBOT, NYMEX and COMEX. Production amounted to 47.549 million tonnes in the first nine months of 2019, dropping 0.99% from 48.023 million tonnes in the first nine months of 2018. Industrial activity is expected to have shrunk for the sixth month in October, a Reuters poll showed, suggesting hardly any relief from slowing global demand and the trade war. Looking back at the main trends in the aluminum space in 2019, Wood Mackenzie Senior Analyst Ami Shivkar pointed to global primary aluminum demand, which was at its lowest level in a … What’s more, a large part of stocks is being kept in unregistered (non-LME) warehouses, which means availability is still ample. Despite some encouraging signs, aluminium price has extended its weakness in October (4th quarter), trading in the range US$ 1696-1738/tonne. Aluminum isn’t an exception. The aluminium market is oversupplied despite many people forecasting a deficit, consultancy Harbor Aluminum’s managing director Jorge Vazquez told delegates at the LME Week seminar. It is essential to address a situation like Coronavirus in the present study. He is also one of CME Group’s spokespeople on global economic, financial and geopolitical conditions. The producers had to supply aluminium to LME warehouses as they could not reduce the volumes of metal production fast enough after the decline in demand. And it is cheap. All future automobiles will need to satisfy stringent emission standards and the best way to do it with exciting technologies is toreduce their weight. The demand for aluminium decreased abruptly, while the price of a tonne of aluminium dropped from USD 3,200 to USD 1,200. Sign up to our weekly newsletter! According to information from customs authorities, China exported 4.37 million tonnes of unwrought aluminium and semi-aluminium products in the first nine months of the year – 2.8% more than in the previous year. So far, the U.S. has imposed only a 10% tariff on $34 billion of Chinese goods, too small to make much of a difference. The dispute over tariffs is continuing to impact markets across several asset classes, from equities to agriculture and metals. Investors don’t seem to think that the Administration is likely to change its tariff policy soon. In the Middle East, primary aluminium production increased by 4.35% year-on-yea… Chinese official GDP has an even stronger correlation with aluminum prices up to one year in advance, but official Chinese GDP has been unusually stable of late, showing between 6.5% and 7.0% growth in each quarter since early 2015. 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