Aluminum Pricing Outlook – China

China – Aluminum Update

Price:

RM prices have softened a bit in China due to the lockdown and lower demand for housing. Pricing outlook for the rest of 2022 and 2023 remains robust – Last 90 days have seen a reduction of about 9% but the end of the year is likely to be around 21000 RMB / Ton. However, X-rate has strengthened so the net price should remain stable within +/- 7%.

Capacity / Production:

China’s Aluminum production has steadily increased from 11 Million tonnes in 2011 to 38.5 Million tonnes in 2021. Beijing’s capacity cap is 45 million tonnes. In 2022, many locations are experiencing power cuts but Chinese aluminum demand is high domestically as well as abroad, especially in

China’s share of global output was the highest on record at around 59%.

Demand:

Chinese demand was severely constrained earlier this year due to lockdowns. However, it has grown dramatically higher than last year supported by a domestic increase in activity as well as export growth. The increase in consumption is driven by exports for the first time in many years in addition to growth in renewables and electric vehicle-related sectors.

Europe Impact:

Due to Power cuts (related to high energy costs in Europe and resulting capacity cuts and plant shutdowns), the Chinese supply of aluminum is seeing higher demand in Europe and other places around the world. Chinese stock share prices of Aluminum companies have risen over the last two months because of this.

https://www.reuters.com/markets/commodities/china-2021-aluminium-output-rises-annual-record-high-2022-01-17/

https://seekingalpha.com/article/4512626-china-primary-aluminum-supply-improves-pragmatism-wins

https://www.mining.com/web/column-global-aluminum-production-pendulum-swings-back-to-china/