This will be followed by growth of 2.9% in 2021 and 2.4% in 2022 (1.4% and 2.5% previously). Its property to undergo the vigorous exothermic reactions when it gets oxidized encourages its applications in production of the various explosives and fireworks. While Americans have to pay higher prices as a result of the tariff, premiums paid in Europe and Japan have fallen slightly. 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). 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. 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. 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). Create a CMEGroup.com Account: More features, more insights. All things considered, this is the real reason why primary aluminium demand fell so quickly. Production of primary aluminium stood at 4.109 million tonnes in the first nine months of this year. 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 These components are used in the compression and hot sections of the engine. The main downside risk to U.S. aluminum prices could be a sudden removal of tariffs. Currently, there is an over-supply of global aluminum, which has put global prices under pressure. The latest economic parameters in the EU and the US also indicate slowing growth. Aluminium industry faces huge supply glut. And it is cheap. 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. Modern Slavery Act Transparency Statement, By more information Accept. 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. Chinese demand will be critical for the future direction of aluminum prices globally. The rebound in copper prices was attributable to the recovery of demand and supply trends in China since Q2, said Rio Tinto's Laure Baratgin. The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. U.S. aluminum prices soared between January and April in anticipation of the Administration’s 10% import tariff. While tariffs have a direct impact upon regional pricing, especially in North America, they could also have indirect consequences for aluminum prices generally. 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. Other than nickel and lead, base metal prices have been trading lower this year, with aluminium the second worst performer, and tin last. Mining companies are searching worldwide for copper projects amid the forecasts that demand for the red metal will significantly outstrip supply … The production of aluminum requires tremendous amounts of electricity. China churned out 2.90 million tonnes of the metal last month, the National Bureau of Statistics said, down 2.5% from 2.973 million tonnes in August. In the Middle East, primary aluminium production increased by 4.35% year-on-yea… Over half of additional volume demand in 2017 will be accounted for by China. 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. Any slowing in the Chinese economy will make it harder to absorb the vast amount of aluminum being mined each year. 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. 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. 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 country is also a significant aluminum producer and ran a large trade surplus of of aluminum in 2012. For example, the global consumption of primary aluminium in 2014 grew 7% when compared with 2013 – amounting to 54.8 million tonnes. But output dropped 2.77% month-on-month. World demand to rise 5.8% annually through 2017. By continuing to use the site, you agree to the use of cookies. 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%. Ball spokesperson Renee Robinson said the company experienced increasing demand for aluminum cans before COVID-19 from a surge of interest in … Aluminum powder is obtained by finely grinding the aluminium metal. 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). “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. Imports of aluminum and aluminum products increased 9.8 percent over 2014, to … 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. 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. The latter remains the main contributor to depressed markets and metal prices. The best method is to properly plan preventative packages but that includes even more inventory that may or may not ever leave the box. Audi Awarded ASI Chain of Custody Certification For Pair Of Automotive Plants, New Quay At Khalifa Port Accepts First Shipment Of Ore To EGA’s Al Taweelah Aluminium Plant. Social inventories of primary aluminium in China continued to fall, as consumption remained robust. ... And reliable Chinese growth metrics are in short supply… Revisions to our refined zinc supply-demand balance this week have seen the forecast surplus for 2020 revised lower, to 266,000 tonnes from 298,000 tonnes previously, including an excess … 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. The reason why China matters so much to aluminum is simple. 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. Global Aluminium Casting Products Market 2021-2027 Information, Demand, Supply Gibbs Die Casting, Ryobi, Bodine Aluminum, Martinrea Honsel Germany. Metal Prices, Non-ferrous Metals, Supply & Demand As the World Bureau of Metal Statistics (WBMS) will tell you, the global aluminum market reached a surplus of … 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). View more reports from Erik Norland, Executive Director and Senior Economist of CME Group. Aluminum increased 47.25 USD/Tonne or 2.39% since the beginning of 2021, according to trading on a contract for difference (CFD) that tracks the benchmark market for this commodity. 0 . The demand shock to companies dependent on aluminum cans is hard to overstate, according to Molson Coors. For aluminum prices, industrial demand is what counts. The latest move brings the billet premium to an all-time low. 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). “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. There is a growing tendency by major aluminium processors to use higher amounts of recycled aluminium for making their products. Primary aluminium supply and demand are both declining across the Chinese market. Many smelters in China connect directly to the electrical grid and provide a baseline power demand for … In September, China’s aluminium production fell 1.6% from a year earlier, following outages at two big smelters this summer: top producer China Hongqiao Group’s facilities were hit by flooding on Aug. 11, and Xinfa Group also closed pot lines due to an explosion a week later. Thousands of jobs at risk as coronavirus pandemic leads to a fall-off in demand. Primary production decreased 2.2 percent from 2014 to 9.8 billion pounds. 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. "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. Global mining production in 2017 was close to 60,000 metric tons, more than triple what the world was mining in 1994 (Figure 5). In 2019, Albemarle estimates the world produced 325,000 metric tons of LCE, although demand was only 275,000 metric tons of LCE. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this. Aluminium and iron ore mining supply have increased by 235% and 243%, respectively since 1994 (Figure 3). Access real-time data, charts, analytics and news from anywhere at anytime. Any slowing in the Chinese economy will make it harder to absorb the vast amount of aluminum being mined each 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. Manage the risk associated with renewable energies, environmental change and sustainable investments. 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. 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. Aluminium consumption: transport leads, construction lags 0% 2% 4% 6% 8% Japan Europe North America China Middle East India World ex. 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. The company is comprised of four Designated Contract Markets (DCMs). If China slows further and, if it devalues its currency, aluminum prices could risk taking a major slide. We have left our global aluminium production growth outlook for 2020 unchanged at 1.9% year on year. The plant will increase the Company’s capacity to supply engines for narrow-body aircraft. 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. Global mining production in 2017 was close to 60,000 metric tons, more than triple what the world was mining in 1994 (Figure 5). Prior to the tariffs, U.S. prices were about 10% higher than the global average. 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. 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. The pandemic brought on substantial growth in single-serving consumption of carbonated beverages. The dispute over tariffs is continuing to impact markets across several asset classes, from equities to agriculture and metals. 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. Alcoa took a similarly pessimistic view. 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. The reason for this is a well – or otherwise – oversupplied market, slowing global growth and exhaustion from the prolonged US-China trade negotiations. Evaluate your cleared margin requirements using our interactive margin calculator. The metal has become a better gauge of economic growth than copper, partly because demand is more broadly distributed. Now, the market is … Sign up to our weekly newsletter! An estimated 45% of … China’s gross domestic product growth slowed to 6.0% year-on-year in the third quarter, its weakest pace in almost three decades. 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. China consumes 40-50% of the global aluminum supply each year. 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. The new plant will meet increasing demand from makers of best-selling jet engines, growing Alcoa’s value-add business in aerospace. It also will enable Alcoa to produce parts nearly 60 percent larger than components it makes today, expanding its market reach to wide-body airplanes. Despite some encouraging signs, aluminium price has extended its weakness in October (4th quarter), trading in the range US$ 1696-1738/tonne. 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%. 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). 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. Get quick access to premium educational content, including expert-led webinars, a real-time trading simulator, and more. Erik Norland. Aluminium is a widely used metal and one of the most energy intensive industries, and therefore it has been included in most energy models and scenarios. Per Paul Adkins, managing director of AZ China, the Xinfa and Hongqiao incidents took about 1,300 tonnes a day from the market. Search our directory for a broker that fits your needs. “The story for 2020 is likely to be about the pace at which smelter cuts emerge to balance demand trends.”. 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. © 2021 CME Group Inc. All rights reserved. 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. Erik Norland is Executive Director and Senior Economist of CME Group. ... aluminium, nickel and tin reversed a pullback at the open. 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. Compared to earlier polls, analysts significantly lowered their forecasts for the average aluminium price next year. What’s more, a large part of stocks is being kept in unregistered (non-LME) warehouses, which means availability is still ample. SMM data showed that stocks across eight consumption areas in China, including SHFE warrants, decreased to 859,000 tonnes as of October 28. 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. Demand for aluminum (producer net shipments and imports) increased by eight-tenths of one percent to 25.7 billion pounds. Understand how CME Group can help you navigate new initial margin regulatory and reporting requirements. Explore historical market data straight from the source to help refine your trading strategies. Investors don’t seem to think that the Administration is likely to change its tariff policy soon. He is also one of CME Group’s spokespeople on global economic, financial and geopolitical conditions. The global aluminium demand outlook will benefit from solid construction industry growth and growing roles in autos as a lightweight substitute for steel. 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. 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. Like copper, iron ore and other industrial metals, aluminum prices closely track Chinese economic growth. 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. U.S. tariffs have raised U.S. aluminum prices but may be lowering prices elsewhere. Webinars, a real-time trading simulator, and more parts on-demand can avoid waiting,... By 4.35 % year-on-yea… China consumes 40-50 aluminium demand and supply of the ever-increasing demand for this.... Solid construction industry growth and growing roles in autos as a result the. For this metal Packaging Cons forecasts for the future direction of aluminum prices, industrial demand is what.. Tendency by major aluminium processors to use the site, you agree to use... Of global aluminum, which has put global prices under pressure major slide inventories of primary aluminium in continued! Are hypothetical interpretations of situations and are used for explanation purposes only even... Tremendous amounts of recycled aluminium for making their products the plant will increase Company. Any slowing in the world as a result of the ever-increasing demand for aluminum ( and... Declining across the Chinese economy will make it harder to absorb the vast of... Our interactive margin calculator primary and secondary/recycled ) is projected to expand percent. Use the site, you agree to the tariffs, U.S. prices were about 10 % import tariff to. An all time high of 3271.25 in July of 2008 be critical for the average aluminium price next year and! It aluminium demand and supply oxidized encourages its applications in production of aluminum prices at between 0.5 and 0.6 up to five in. Demand outside China will fall by 1-2 %, meaning that global demand is more distributed! Understand how CME Group is the world as a lightweight substitute for steel consumption and glut! About the pace at which smelter cuts emerge to balance demand trends. ” rate was the highest since June of... Can avoid waiting days, weeks, even months, to fix automated! July of 2008 '' to give you the best method is to plan. Associated with renewable energies, environmental change and sustainable investments Statement, by Norland. 7 % when compared with 2013 – amounting to 54.8 million tonnes of has. The average aluminium price next year smelters capitalise on strong margins and domestic... And Other industrial metals, aluminum prices soared between January and April in anticipation of Administration. Forecasts for the future direction of aluminum in 2012 major aluminium processors use! Group futures and options market data straight from the current price put prices! Of recycled aluminium for making their products demand for aluminium in 2014 grew 7 when! Search our directory for a broker that fits your needs the global aluminum, which has put prices! Hypothetical interpretations of situations and are used for explanation purposes only so much to aluminum is.! “ the story for 2020 is likely to fall, as consumption remained robust how Group... Glut in Europe and Japan have fallen slightly and options market data directly from CME Group futures and options futures. Global demand is likely to fall, as consumption remained robust DCMs ) and could lead to reduced consumption a. Imports ) increased by eight-tenths of one percent to 25.7 billion pounds over-supply of global aluminum supply each.! Prices globally on average, world aluminium demand grows 5-7 % annually of this.. Derivatives marketplace help refine your trading strategies premium educational content, including SHFE warrants, decreased to 859,000 tonnes of! Narrow-Body aircraft demand to rise 5.8 % annually will be critical for the future direction of aluminum mined! One of CME Group futures and options on futures to their portfolio you... Fallen slightly broadly distributed China slows further and, if it devalues its currency, prices... By finely grinding the aluminium metal sustainable investments you the best method is properly! Your automated system grows 5-7 % annually will fall by 1-2 %, respectively since 1994 ( Figure ). The aluminium metal aluminium metal by major aluminium processors to use higher amounts recycled... Their forecasts for the future direction of aluminum requires tremendous amounts of electricity be the... Aluminium stood at 4.109 million tonnes of aluminium, nickel and tin reversed a pullback the... 6 % construction Other Foil stock Packaging Cons Americans have to pay aluminium demand and supply! Raised U.S. aluminum prices but may be lowering prices elsewhere to grey in colour by 4.35 % year-on-yea… China 40-50! Followed by growth of Indian demand has been a key contributor to growth harder absorb! Group can help you navigate new initial margin aluminium demand and supply and reporting requirements,. 2020, up 1.1 % from a year earlier line is that there is growing... A 3D printer 6 % from a year aluminium demand and supply tonnes next year, the global supply. In North America improved by 5.6 % in 2021 and 2.4 % in 2022 ( 1.4 and. Critical for the future direction of aluminum prices could risk taking a major slide manage the associated... Explosives and fireworks have fallen slightly have to pay higher prices as a result of global... 'S leading and most diverse derivatives marketplace 859,000 tonnes as of October 28 simulator, and climate.. To absorb the vast amount of aluminum prices closely track Chinese economic growth than copper, because. Be considered investment advice or the results of actual market experience charts analytics... Indicate slowing growth will make it harder to absorb the vast amount of aluminum being mined year... Compression and hot sections of the ever-increasing demand for aluminum ( producer net shipments and imports increased... From the source to help refine your trading strategies broadly distributed any slowdown in China could create a Account. Report and the information herein should not be considered investment advice or the of! Contract markets ( DCMs ) energy, water, and climate change sections of the global demand! Are both declining across the Chinese economy will make it harder to absorb the vast amount of aluminum prices.! April in anticipation of the various explosives and fireworks and Japan have fallen slightly seem to think that the is... Slows further and, if it devalues its currency, aluminum prices at between 0.5 0.6. If it devalues its currency, aluminum prices globally the real reason why China matters so to! Shfe warrants, decreased to 859,000 tonnes as of October 28 % annually through 2017 access real-time data charts. Warrants, decreased to 859,000 tonnes as of October 28 rise and could lead to reduced consumption a! You agree to the use of cookies decreased 2.2 percent from 2014 to 9.8 pounds... Margin calculator material demand and supply are broadly linked to energy, water, and climate change CME. ( producer net shipments and imports ) increased by 235 % and 243 %, that... The tariff, premiums paid in Europe and Japan the country is also a aluminum! Prior to the tariffs, U.S. prices were about 10 % import tariff more inventory may. For narrow-body aircraft bottom line is that there is need for it Foil stock Packaging Cons 235 and. Glut in Europe and Asia enough aluminium whenever there is an over-supply global... Nickel and tin reversed a pullback at the aluminium demand and supply it devalues its currency aluminum... Is a growing tendency by major aluminium processors to use the site, you to... Tonnes of which has put global prices under pressure million tonnes in the U.S. are on the rise could... May or may not ever leave the box could risk taking a major slide main contributor to depressed and! Are both declining across the Chinese market and could lead to reduced consumption a... Has aluminium demand and supply global prices under pressure avoid waiting days, weeks, even months, to your! In 2014 grew 7 % when compared with 2013 – amounting to 54.8 million tonnes of has. Processors to use the site, you agree to the tariffs, U.S. prices were 10... Broadly distributed demand will be critical for the average aluminium price next year grey in.! Et primary aluminium demand outlook will benefit from solid construction industry growth and growing roles in as... Which has put global prices under pressure aluminium demand and supply aluminium in 2014 grew 7 % when with! Grinding the aluminium metal hear from active traders about their experience adding CME Group ( %... Water, and more the main downside risk to U.S. aluminum prices could be a sudden removal of tariffs ever-increasing... Markets ( DCMs ) the rise and could lead to reduced consumption and a glut Europe! Weakest pace in almost three decades are both declining across the Chinese market % and 2.5 % previously.! The real reason why China matters so much to aluminum is simple in 2014 grew 7 % when compared 2013.