Market Update: Aluminum Alloy Market

2021-08-26 16:54:19

Despite the declining demand for constructional aluminum profiles, both international and China's market price of aluminum alloy has kept surging dramatically, reaching the highest price level in 15 years. The spot price of aluminum alloy (A00) reached RMB21,000 (about USD3255) per ton yesterday. This may be attributed to China's 'double control' (control on power consumption and waste emission) policy and prevailing popularity of electric automobiles.

Due to the government's 'double control' policy, major Chinese smelters of aluminium alloy have to confine their existing output or to postpone the launching of new production sites. The country, accounting for 2/3 of the world's production capacity of aluminum profiles, is boosting the aluminum alloy price by imposing environmental tax on the consumers all over the world. Maybe this would help to reduce the unreasonable consumption of construction material, but will surely quench the enthusiasm for infrastructure development elsewhere to help economic recovery.

On the other hand, the prevailing popularity of electric automobiles has given another outlet for aluminum extrusion profiles in China. There is huge demand for the making of the structure and different parts of these cars and motorcycles. Although many manufacturers of constructional aluminum profiles in China have cut their output down to 70%, manufacturers of industrial parts are enjoying the benefit from hot sales of electric automobiles.

In all, we expect the high price level of aluminum alloy to persist at least for three months more.