Rising Demand and Supply Disruptions Drives Aluminium Alloy Ingot Prices Upward in Asia

The Aluminium Alloy Ingot market in Asia has shown positive momentum in recent weeks, with prices rising due to increased scrap prices and optimistic market sentiment. The Federal Reserve's interest rate cut this month has further bolstered the market.

In Malaysia, Aluminium Alloy Ingot prices increased by 0.5% in the second week of September. A significant development in the region was a fire incident at Press Metal Aluminium Holdings' phase 3 smelter in Samalaju Industrial Park on September 9th. The company reported that about 9% of its total smelting capacity across Samalaju and Mukah was affected, with an estimated four-month recovery period for the damaged pots. This event is expected to impact the regional supply of Aluminium Alloy Ingot. On the other hand, Press Metal Aluminium Holdings also announced a partnership with three Indonesian companies to operate an alumina refinery plant in West Kalimantan, Indonesia. This move could potentially increase the supply of Aluminium Alloy Ingot in the future.

China's Aluminium Alloy Ingot market has seen a notable uptick, with prices rising by 0.5%. The domestic spot market for primary aluminum has demonstrated both strength and volatility, driven by increased downstream demand as businesses replenish inventories ahead of the Mid-Autumn Festival. This festive period has had a positive impact on consumer sentiment across the region, typically leading to increased retail activity and business operations. The surge in demand for Aluminium Alloy Ingots spans various sectors, with the automotive and manufacturing industries playing key roles. Both primary and scrap aluminum markets have reported positive transaction trends, contributing to the overall price increase. Chinese exports of unwrought aluminum and aluminum products have also grown significantly, reaching 594,000 tons in August 2024. This represents a 1.19% increase month-on-month and a substantial 21.2% rise year-on-year, indicating strong international demand for Chinese aluminium products. In a related development, the European Commission has greenlit an automotive aluminum sheet joint venture between Kobe Steel, Baowu Aluminum Technology and Baosteel. This collaboration aims to address the growing demand for lightweight materials in the automotive sector, particularly for new energy vehicles. Industry analysts expect this venture to boost demand for Aluminium Alloy Ingots further, as automakers increasingly turn to aluminum for its lightweight and environmentally friendly properties.

As the market enters a period of increased activity and demand, these developments are expected to significantly impact global Aluminium Alloy Ingot prices and supply chains. Factors such as the arrival of the peak consumption season, an anticipated rebound in Aluminium Alloy Ingot operating rates, increasing demand from electric vehicles and solar farms, and the rise in US tariffs on Chinese aluminium imports from 7% to 25% can contribute to the positive outlook. According to Chemanalyst, the Aluminium Alloy Ingot market is poised for further growth, with prices expected to continue their upward trend.