This report and the information herein should not be considered investment advice or the results of actual market experience. Get quick access to tools and premium content, or customize a portfolio and set alerts to follow the market. China Total world 0% 2% 4% 6% Construction Other Foil stock Packaging Cons. While tariffs have a direct impact upon regional pricing, especially in North America, they could also have indirect consequences for aluminum prices generally. The latter remains the main contributor to depressed markets and metal prices. Social inventories of primary aluminium in China continued to fall, as consumption remained robust. 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. Historically, Aluminum reached an all time high of 3271.25 in July of 2008. Despite some encouraging signs, aluminium price has extended its weakness in October (4th quarter), trading in the range US$ 1696-1738/tonne. “Many hold the view that the western world is in a significant aluminium deficit, but we see a surplus,” Vazquez said, pointing to LME prices that have fallen by around 40% since April last year. And it is cheap. Evaluate your cleared margin requirements using our interactive margin calculator. Aluminium industry faces huge supply glut. 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. Erik Norland. With 23500+ verified members of the non ferrous metal industry – sellers, exporters, buyers, consumers, importers, indenters, stockists, brokers; MTLEXS.com is India's first online marketplace dedicated exclusively to non- ferrous metals like Aluminium, Brass, Copper, Cupronickel, Lead and Zinc. All examples in this report are hypothetical interpretations of situations and are used for explanation purposes only. World demand for aluminum (primary and secondary/recycled) is projected to expand 5.8 percent per year through 2017 to 82.5 million metric tons. The new plant will meet increasing demand from makers of best-selling jet engines, growing Alcoa’s value-add business in aerospace. View more reports from Erik Norland, Executive Director and Senior Economist of CME Group. For example, the global consumption of primary aluminium in 2014 grew 7% when compared with 2013 – amounting to 54.8 million tonnes. Get quick access to premium educational content, including expert-led webinars, a real-time trading simulator, and more. Investors don’t seem to think that the Administration is likely to change its tariff policy soon. Further information on each exchange's rules and product listings can be found by clicking on the links to CME, CBOT, NYMEX and COMEX. "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. 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. 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). 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. When aluminum demand last contracted during the financial crisis and unwanted metal started flooding into warehouses, it took more than a decade to work through the glut. SMM learned that 2.3 million tonnes of which has been shut. pratik December 24, 2020. 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. The Aluminium Corp of China Ltd. (Chalco) said that it will cut 470,000 tonnes of aluminium capacity, which led to announced aluminium capacity cuts in China so far this year to reach 2.76 million tonnes. “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. Analysts expect cash LME aluminium to average US$ 1814 a tonne in 2020, up 6% from the current price. 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. Sign up to our weekly newsletter! 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). The current pricing reality jars with Alcoa’s assessment that the global aluminum market will record a second year of supply shortfall to the tune of 1.7-2.1 million tonnes in 2019. As political tensions escalated during the year, aluminum demand was hurt more than expected, with demand slowing down in China, the largest producer and consumer of the metal. China’s gross domestic product growth slowed to 6.0% year-on-year in the third quarter, its weakest pace in almost three decades. 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. Access real-time data, charts, analytics and news from anywhere at anytime. SMM data showed that stocks across eight consumption areas in China, including SHFE warrants, decreased to 859,000 tonnes as of October 28. ... aluminium, nickel and tin reversed a pullback at the open. German automaker Audi AG announced yesterday that it has received the Chain of Custody certification from the Aluminium Stewardship Initiative... American flat-rolled aluminium producer JW Aluminum announced the closure of their plant in Williamsport, Pennsylvania by month’s end. 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. If the imposing of U.S. tariffs on China slows its economic growth or causes the country to devalue its currency, it could depress aluminum prices around the world. Aluminium and iron ore mining supply have increased by 235% and 243%, respectively since 1994 (Figure 3). In the July poll, analysts had expected a deficit of 88,000 tonnes next year. Alcoa took a similarly pessimistic view. CME Group is the world's leading and most diverse derivatives marketplace. Global Aluminium Casting Products Market 2021-2027 Information, Demand, Supply Gibbs Die Casting, Ryobi, Bodine Aluminum, Martinrea Honsel Germany. U.S. aluminum prices soared between January and April in anticipation of the Administration’s 10% import tariff. Hear from active traders about their experience adding CME Group futures and options on futures to their portfolio. Its property to undergo the vigorous exothermic reactions when it gets oxidized encourages its applications in production of the various explosives and fireworks. What’s more, a large part of stocks is being kept in unregistered (non-LME) warehouses, which means availability is still ample. Imports of aluminum and aluminum products increased 9.8 percent over 2014, to … Understand how CME Group can help you navigate new initial margin regulatory and reporting requirements. Material demand and supply are broadly linked to energy, water, and climate change. The best method is to properly plan preventative packages but that includes even more inventory that may or may not ever leave the box. 0 . The dispute over tariffs is continuing to impact markets across several asset classes, from equities to agriculture and metals. Aluminum powder is obtained by finely grinding the aluminium metal. Modern Slavery Act Transparency Statement, By For aluminum prices, industrial demand is what counts. An estimated 45% of … “The story for 2020 is likely to be about the pace at which smelter cuts emerge to balance demand trends.”. The views in this report reflect solely those of the author(s) and not necessarily those of CME Group or its affiliated institutions. 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. In the first nine months of 2019, China produced 26.37 million tonnes of aluminium, up 1.1% from a year earlier. Demand for copper has surged significantly in the past 20 years and is expected to rise further due to the surge in demand for electric vehicles, while global copper supply is likely to continue to shrink in the future, according to Paul Ward at Anglo American. Any slowdown in China could create a global supply glut that could depress prices, especially in Europe and Japan. Per Paul Adkins, managing director of AZ China, the Xinfa and Hongqiao incidents took about 1,300 tonnes a day from the market. The main downside risk to U.S. aluminum prices could be a sudden removal of tariffs. 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. 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). World demand to rise 5.8% annually through 2017. The plant will increase the Company’s capacity to supply engines for narrow-body aircraft. 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. There is a growing tendency by major aluminium processors to use higher amounts of recycled aluminium for making their products. The Chinese economy, the world’s second largest after the United States, is already beginning to slow under the burden of high debt levels and collapsing emerging market currencies (Figure 4). Prior to the tariffs, U.S. prices were about 10% higher than the global average. Global mining production in 2017 was close to 60,000 metric tons, more than triple what the world was mining in 1994 (Figure 5). SUPPLY & DEMAND Global aluminium production fell by 0.5% in the first half of this year, to 31.6 million tonnes, according to the International Aluminium Institute (IAI). Many smelters in China connect directly to the electrical grid and provide a baseline power demand for … These components are used in the compression and hot sections of the engine. The company is comprised of four Designated Contract Markets (DCMs). By continuing to use the site, you agree to the use of cookies. 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. Mining companies are searching worldwide for copper projects amid the forecasts that demand for the red metal will significantly outstrip supply … On average, world aluminium demand grows 5-7% annually. The demand shock to companies dependent on aluminum cans is hard to overstate, according to Molson Coors. But output dropped 2.77% month-on-month. Search our directory for a broker that fits your needs. 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 pandemic brought on substantial growth in single-serving consumption of carbonated beverages. Norsk Hydro predicts demand outside China will fall by 1-2%, meaning that global demand is likely to fall by 0.5%. Currently, there is an over-supply of global aluminum, which has put global prices under pressure. 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. He is also one of CME Group’s spokespeople on global economic, financial and geopolitical conditions. Now, they are almost 20% higher. Press Release Metal Straws Market Report 2021 by Supply, Demand, Consumption, Sale, Price, Share, Revenue and Top Manufacturers Published: Jan. 4, 2021 at 7:48 a.m. more information Accept. Disclaimer  |  Privacy Policy  |  Cookie Policy  |  Terms of Use  |  Data Terms of Use  |  Modern Slavery Act Transparency Statement  |  Report a Security Concern. 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. Within the BRIC economies, the growth of Indian demand has been a key contributor to growth. 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. Like copper, iron ore and other industrial metals, aluminum prices closely track Chinese economic growth. One of the conclusions of the LME Week (held between October 27 and November 1) is that a combination of weak macroeconomic data and an anticipated increase of global aluminium supplies is prompting expectations that more metal will be held in financing deals for long-term gain. 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. Primary production decreased 2.2 percent from 2014 to 9.8 billion pounds. This will be followed by growth of 2.9% in 2021 and 2.4% in 2022 (1.4% and 2.5% previously). The bottom line is that there is enough aluminium whenever there is need for it. Explore historical market data straight from the source to help refine your trading strategies. Primary aluminium supply and demand are both declining across the Chinese market. Any slowing in the Chinese economy will make it harder to absorb the vast amount of aluminum being mined each year. Stream live futures and options market data directly from CME Group. ET The Li Keqiang index correlates aluminum prices at between 0.5 and 0.6 up to five quarters in advance (Figure 3). Any slowing in the Chinese economy will make it harder to absorb the vast amount of aluminum being mined each year. The country is also a significant aluminum producer and ran a large trade surplus of of aluminum in 2012. The global production of aluminum foils was at 5.5 MMT during 2019, and it is expected to grow moderately at 5–5.5 percent (CAGR) until 2024 and reach 7 MMT Increase in demand from the automobile industry and rising consumption of flexible packaging (especially pouches) have bolstered the growth for aluminum foils The sole adjustment to our supply outlook is stronger Chinese growth as smelters capitalise on strong margins and improved domestic demand. Production of primary aluminium stood at 4.109 million tonnes in the first nine months of this year. So far, the U.S. has imposed only a 10% tariff on $34 billion of Chinese goods, too small to make much of a difference. The firm... Abu Dhabi’s shipping volume is about to rise thanks to the opening of the South Quay at Khalifa Port last... Base metals prices reacted positively to the progress registered in the latest round of US – China trade talks in mid-October, but the markets remained cautious about the prospects for a final agreement. However, the latest forecasts indicate that the demand growth for aluminium will be between 0 and 1% y/y, while CRU Group predicts the market to shift into surplus in the fourth quarter with 185,000 tonnes, after deficits of 1.286 million tonnes in the second quarter and 467,000 tones in the third quarter. The global market is due to flip into a surplus of 304,000 tonnes next year from a deficit of 658,500 tonnes in 2019, according to the consensus numbers. According to Fastmarkets, the aluminium 6063 extrusion billet premium, delivered Midwest US, fell to 7-9 cents per lb ($ 154.3/t – $198.4/t), down by half a cent from the previously assessed range of 7.5-9.5 cents per lb on October 11. The reason for this is a well – or otherwise – oversupplied market, slowing global growth and exhaustion from the prolonged US-China trade negotiations. We have left our global aluminium production growth outlook for 2020 unchanged at 1.9% year on year. Demand for aluminum (producer net shipments and imports) increased by eight-tenths of one percent to 25.7 billion pounds. The global aluminium demand outlook will benefit from solid construction industry growth and growing roles in autos as a lightweight substitute for steel. Nickel jumped 1.9%, tin rose 0.6% and copper gained 0.4%, while aluminim dipped 0.1%, zinc fell 0.8% and lead dropped 1.2%. Every year aluminium production grows in the world as a result of the ever-increasing demand for this metal. 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. In the Middle East, primary aluminium production increased by 4.35% year-on-yea… 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. Erik Norland is Executive Director and Senior Economist of CME Group. The latest move brings the billet premium to an all-time low. ... And reliable Chinese growth metrics are in short supply… The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. Thousands of jobs at risk as coronavirus pandemic leads to a fall-off in demand. The reason why China matters so much to aluminum is simple. But the average is deceptive, because sharp gains for nickel of over 50% cover the fact that half of the metals are in the red, with losses of up to 15%. Now, the market is … U.S. tariffs have raised U.S. aluminum prices but may be lowering prices elsewhere. All things considered, this is the real reason why primary aluminium demand fell so quickly. Create a CMEGroup.com Account: More features, more insights. As aluminum is not a hedge instrument or is not used for investment purpose, but only has industrial applications, its price moves as per the demand-supply dynamics, with the demand rising … China consumes 40-50% of the global aluminum supply each year. In 2019, Albemarle estimates the world produced 325,000 metric tons of LCE, although demand was only 275,000 metric tons of LCE. World aluminium demand outlook will benefit from solid construction industry growth and growing roles in autos as a of! Prices aluminium demand and supply about 10 % higher than the global consumption of carbonated beverages change its tariff policy soon inventory replace. To help refine your trading strategies U.S. prices were about 10 % import tariff this year China world. Weeks, even months, to fix your automated system of jobs at risk as pandemic... 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