Aluminum Price Trend and Forecast

Regional Price Overview

Get the latest insights on price movement and trend analysis of Aluminium in different regions across the world (Asia, Europe, North America, Latin America, and the Middle East & Africa).

Aluminium Price Trend for the H2 of 2022

Asia

With the dollar strengthening and the interest rates hike by the central bank the feeling of economic recession dominated the market’s sentiments and as a result, the bulk commodities plunged. The price trends of aluminium fell during the said period showing a slight increment from time to time. Though the production costs stabilized during the third quarter, the overall prices remained weak owing to muted demand from downstream sectors. The prices of aluminium ingots averaged 18453.33 RMB/MT towards the end of the third quarter.

The Chinese government had imposed restrictions on heavy industries with a plan to reduce carbon emissions, which had an impact on aluminium prices. Incessant power shortages in the country also disturbed the supply chain of the commodity this year. Aluminium prices stabilized a bit during the fourth quarter for a short term, however, overall prices kept weak averaging 18716.67 RMB/MT towards the end of December’22.

Europe

The European region faced the direct consequences of the Russia-Ukraine conflict triggering an acute energy crisis. With the high-cost inflation and high operating rates, the manufacturers passed on the higher prices to the consumers to cushion their profits resulting in demand destruction. The lowered demand caused the European manufacturers to seek to offload expensive metal leaving limited buffer stock only. Hence, the price trends for aluminium dwindled in the European domestic market.

North America

The aluminium prices in the US domestic market were in line with the global outlook. The prices fell owing to weak demand from the construction and electrical sectors amid high sourcing and operating costs.

Analyst Insight: Due to surging inflations, central banks hiked the interest rates worldwide, controlling the purchasing power and thereby limiting demand. However, going forward the aluminium price trends are expected to strengthen as demand rebounds slowly from the turmoil seen last year.

For the Second Quarter of 2022

Asia

In China, aluminum prices reached a six-month low owing to the stringent covid lockdown restrictions amidst the rising cases. The fear in the market because of uncertainty and low running capacities of the industries caused the prices to fall in the domestic market. 

However, after relaxing the restrictions, the industries started churning the metal at enhanced capacities, which led to stockpiling in the market because of the muted demands in downstream sectors. Hence, the price trends crashed further, averaging around 2685 USD/MT on the domestic front.

Europe

The production of primary aluminum is a highly energy intensive process. The European industrial sector is already facing an acute energy crisis due to the ongoing confrontation. The high production costs, complex supply, and increased demand from the automotive industry caused the aluminum price increase in the region.

With sanctions against Russia, the European governments are frantically working to meet the domestic demands. During this forecast quarter, the prices averaged 2950 USD/MT on London Metal Exchange.

North America

The price trends were in line with its Asian counterpart due to the muted demand and higher production levels. The price of aluminum averaged 2400 USD/MT (approx.) in the United States.

For the First Quarter of 2022

Asia

In March 2022, in China, per ton price of aluminum was 22640 RMB/MT. Secondary or recycled aluminum makes for a sizable portion of worldwide aluminum usage. Due to its cost-effectiveness, scrap from automobiles, equipment, beverage cans, and machinery was recycled and reused.

Reprocessing secondary metal or trash uses a fraction of the energy necessary to produce new metal from mining, resulting in less environmental damage. In addition, measures such as the creation of automobile disassembly and shredding factories, as well as depollution centres, aided market expansion. Furthermore, widespread usage of the metal in the transportation industry was boosted the aluminum demand even further.

Europe

Since the beginning of 2022, European aluminium prices have risen by roughly 15%, surpassing its historic high of October 2021 - an increase of more than 60% compared to January 2021. Because energy accounts for a large share of production costs, more than a third, a fast increase in the price of gas has a significant influence on company profitability, particularly in Europe, where natural gas prices have climbed by about 550% from December 2020 to December 2021.

As a result, European aluminium manufacturers are forced to make a difficult decision. Either they shut down their smelters or they cut back on production, even if it means losing money. This is the option selected by Europe's largest smelter at the end of December 2021. Aluminum prices on LME were 3300 USD/MT in January 2022.

For the Fourth Quarter of 2021

Asia

China had begun to reduce its aluminum production in 2021 and instead chose to import large volumes which not only created a global shortage of the metal but also increased the prices for the commodity. In November 2021, an aluminum factory in Yunnan, China suffered a major explosion. This led to a complete halt to production in the region, reducing the production capacity by 300,000 tonnes which impacted the already suffering market supply.

Europe

In most European countries, the energy prices had been increasing significantly in the last quarter of 2021 making the metal’s production highly expensive in the region. In Germany, the average EPEX market price was recorded at 220 USD per megawatt hour which had almost doubled from last year. In France, it had been tripled to close to 300 USD per megawatt hour. This surge in energy prices pushed the major smelters to cut down their productions.

The Aluminum Dunkerque in France, a major producer of aluminum slab and ingots had reduced its production capacity by 3.7% as compared to previous year. Romanian producers, like Alro, also commentated that aluminum production had been unsustainable in the final quarter of 2021.

North America

In 2021, the US was the largest importer of the metal. Aluminum prices had been soaring high in the final quarter 2934 USD/MT as compared to the 2004 USD/MT in the first quarter of the year. Aluminum prices are likely to increase in the upcoming times owing to the supply shortages, the shift towards greener economy, the reduction of carbon emissions in China and the rising demand from the automotive industry for electric vehicles. The high prices of energy sources are also key growth drivers in this market.

Latin America

In Brazil, Alcoa, a major producer of the metal, declared to resume its plant production activities in Sao Luis, Alumar with a plant capacity of 260,000 tonnes per year to keep up with the changing global scenario for the aluminum market. The plant is resuming operations in spite of the hydro-electric problems in Brazil owing to the drought. This increase in production and supply of aluminum is likely to impact the market soon. In the final quarter of 2021, aluminum prices were 14.64k BRL/MT.

For First, Second and Third Quarters of 2021

Asia

The production of the metal in China during the first quarter was 6.3 % higher as compared to the previous year. The demand for the metal is being pushed by the shift towards a greener economy and its demand and consumption are expected to go up in the upcoming years.

However, at the same time in China, the carbon emissions were recorded at 420 million tonnes in 2020, which was then capped at 45 million tonnes for 2021 which means that Beijing will witness a change in its supply forms and switch to secondary supply like metal scraps which may generate a market uncertainty.

Other issues are the energy cap imposed on smelters and workers due to the coal shortage. The production plateaued in certain regions which increased the prices along with a growing consumption as more and more people shift towards electric vehicles.

Europe

Due to the supply deficit, the prices had been increasing in Europe. Due to excessive Chinese imports, the supply gap for aluminum was widened as the market was undersupplied by 480,000 tonnes of the metal and this shortage is likely to continue in the upcoming years, as reported by major financial or manufacturing firms like Alcoa, ING and Dutch Multinational. The energy shift towards renewable sources has been a major growth driver for the aluminum industry.

North America

The prices witnessed a three-year high in 2021 in the US. Production had been booming in China. The market was tight amidst supply concerns. In the meantime supply concerns were rising with the increasing demand for manufactured goods. Aluminum prices in London Metal Exchange were as high as 2535 USD/MT in the second quarter of 2021. The Chinese imports for the metal had increased by 36% in April 2021, which led to the price flare.

For the Year 2020

Asia

In the first half of the year, price of the metal China had dropped but started to recover slowly after March. From 2234 USD/MT in the beginning of the year, aluminum prices plummeted to 1791 USD/MT in March which continued till July, as demands came down due to the shutting down of industries in the first quarter owing to the pandemic.

In July, the price rose again to 2217 USD/MT and dropped to 2188 USD/MT in September. The prices started to rise again in October and surpassed 2500 USD/MT. By December, aluminum prices in China had reached 2617 USD/MT, the highest in 2020. The Chinese production witnessed record high values at close to 37 million tonnes of production.

Europe

The falling demand for the metal due to the pandemic caused the prices to fall steadily in the first half of 2020. The global economy had slowed down as most industries like automobile, aerospace and construction had been hit critically by the lockdowns which resulted a slump in its global consumption and demand.

The Norwegian aluminum producer Norsk Hydro reported that the primary global consumption had fallen by 9.41% in the first half of 2020. The production however, at the same time, had been steady with a surplus in the market. Nevertheless, the economies started to expand after the lockdowns were lifted and demand and prices were on the rise in the third and final quarters of 2020.

North America

The average price in the US in 2020 was 1704 USD/MT. The demand had plunged in the first half of 2020 as a result of shutting down of industries due to the COVID-19 pandemic. Economic slowdown and a surplus supply caused the prices to decline further.

The aluminum LME (London Metal Exchange) prices in the beginning of 2020 were 1772 USD/MT which went down to 1602 USD/MT in the first half of the year. This price slump continued till July. However, aluminum prices started to recover in August and by October the prices had exceeded 1800 USD/MT. In November, the prices went up to 2000 USD/MT and the highest price in the year, 2051 USD/MT, was recorded in the first week of December. The demand for the metal had risen as production activities resumed all around the world.

Latin America

In Brazil, the prices were affected not just by the pandemic and overproduction, but also by the shutdown of four production lines of Albras due to an electrical fire. In Venezuela, the aluminum market was crippled due to the absence of a commercial vision, the dropping value of Bolivar exchange rate against USD, infrastructure problems along with political instability in spite of having immense hydroelectric power and modern alumina refinery and bauxite supplies.

Procurement Resource provides latest prices of Aluminum. Each price database is tied to a user-friendly graphing tool dating back to 2014, which provides a range of functionalities: configuration of price series over user defined time period; comparison of product movements across countries; customisation of price currencies and unit; extraction of price data as excel files to be used offline.