ADC 12 aluminium ingot prices in China rise on reduced production, increased costs

ADC 12 aluminium alloy prices in China rose on Wednesday April 28, due to higher production costs and reduced supplies, caused by a month of environmental inspections in Jiangxi province.

China’s Environmental Protection Inspection Team is conducting checks in Jiangxi until May 7 and many ADC 12 producers there have lowered their output while the checks take place.

“We heard that producers in Jiangxi were not running at full capacity; some were running at half of their total capacity, while others only at one third,” a producer source said.

Fastmarkets assessed the price for aluminium ingot ADC 12, exw dp China at 17,900-18,300 yuan ($2,760-2,822) per tonne on Wednesday, widening upward by 100 yuan per tonne from 17,900-18,200 yuan per tonne a week earlier.

The price has been on an upward trend since last week.

Soaring aluminium scrap prices – resulting from tight supplies and a stronger aluminium price on Shanghai Futures Exchange – also provided support to the alloy prices.

Several producers told Fastmarkets that aluminium scrap was really difficult to get hold of right now, especially since November 2020 when China adopted a new customs code for qualified aluminium scrap being imported into the country.

Sources said the domestic aluminium scrap price had jumped to 16,500-16,800 yuan per tonne, up 200-300 yuan per tonne from last week’s 16,300-16,500 yuan per tonne.

“The aluminium scrap price is still rising in a tight market. Besides, a stronger SHFE aluminium price has helped to push [the aluminium scrap] price higher,” a second ADC 12 producer said.

The increased production costs resulting from the elevated aluminium scrap prices have also driven up export prices.

Fastmarkets’ latest weekly price assessment for aluminium ingot ADC 12, cfr Japan, jumped to $2,350-2,450 per tonne on Wednesday, up $70-100 per tonne from $2,280-2,350 per tonne a week earlier.

“In japan, the scrap market is still tight and the price of ADC 12 is higher than in the first weeks of April,” one Japanese purchaser said, “Also, the Chinese price is higher than last week.”

The London Metal Exchange aluminium three-month daily official price rose to $2,397.50 per tonne on April 28, up 2.5% from $2,337 per tonne on  April 21.