The aluminum market is experiencing strong volatility, with prices falling sharply in today’s trading session. At the same time, downstream industries are gradually recovering, bringing some hope for aluminum demand in the coming period.
Aluminum Prices Fall Sharply, Market Under Pressure
Today, the spot aluminum price dropped 320 points, reaching 24,780 CNY/MT. The main aluminum contract on the SHFE also fell to 2,605 CNY/MT, facing pressure from the lower Bollinger Band.
The main reason comes from geopolitical tensions in the Middle East, which have made investors more cautious toward industrial metals.
During the morning session, there was strong competition between buyers and sellers. Buyers temporarily gained the upper hand and pushed the price back above the daily moving average (MA). However, the overall downward trend has not improved yet, keeping the market in a highly volatile state.
Aluminum Demand Recovering Gradually
Although aluminum prices have declined, downstream industries are gradually resuming operations after the holiday period, bringing positive signals for aluminum consumption.
The weekly aluminum-to-water ratio has recovered compared with last month, showing steady improvement from end-users.
Specifically, the renewable energy sector is driving aluminum demand thanks to the rapid installation of photovoltaic (PV) systems. The construction sector is also gradually recovering, with shaped steel production increasing slightly compared with last month.
In addition, orders from the automotive and packaging industries continue to support the production of aluminum sheet, strip, and foil.
Challenges From the Supply Side
However, the domestic aluminum market is still facing major challenges, including high inventory levels and a relatively weak economic foundation. Domestic growth momentum is significantly slower than overseas markets, making downstream companies more cautious when purchasing aluminum billets.
Short-Term Outlook
In the short term, aluminum prices may continue to face downward pressure due to geopolitical tensions and high interest rates in major markets such as the United States and Europe.
However, if demand from downstream industries continues to recover strongly, aluminum prices may find a bottom in Q2 2024.
Advice for Investors
In a highly volatile market environment, investors should adopt a wait-and-see strategy. Closely monitoring price movements, inventory levels, and economic stimulus policies from China will help investors make more reasonable decisions.
The aluminum market is currently in a sensitive phase, but with gradual recovery from downstream industries, the long-term outlook remains positive.
Follow the next update for the latest developments in the aluminum market.
Reference sources: SHFE Exchange, China Nonferrous Metals Association, Global PV Industry Reports.
Mia Ha
International Sales Executive
Minh Dung Aluminum
📧 kinhdoanh@nhomminhdung.vn
📱 +84 332 008 948 (WhatsApp/Wechat)
🌐 https://minhdungholdings.com
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