Global aluminium market abundantly supplied at the beginning of the year

The International Aluminium Institute (IAI) reported yesterday that global aluminium production fell 1.5% year-on-year in March to 5.69 million tonnes, or 183.6 thousand tonnes per day. However, production on a daily basis was the highest in eight months. The year-on-year decline was almost entirely due to China (-2.1%), according to IAI data. However, the National Bureau of Statistics (NBS) had reported an increase in Chinese aluminium production earlier in the week. The discrepancy between the IAI and the NBS is reflected in the baseline: the IAI has set Chinese production in March 2021 higher than the NBS.

On the other hand, both agree on the March value this year. According to industry circles, the increase in Chinese production is partly due to the restart of previously idled capacities. Production is expected to rise further in April as profit margins are good and energy supplies are improving. According to the monthly release of the World Bureau of Metal Statistics (WBMS), the global aluminium market was amply supplied in the first two months of the year: the WBMS puts the supply surplus at 342 thousand tonnes. Although, according to WBMS data, production fell by 0.4% compared to the same period last year, the decline in demand was much more pronounced at -4%. China played the main role here, where the restrictions in connection with the Corona pandemic made themselves felt. However, the WBMS' assessment does not coincide with the price development. In the meantime, the aluminium market is likely to be tighter in our opinion, as the Ukraine war and its consequences have shaken up the market. The supply from Russia is likely to be limited by now.

Source: Commerzbank Research, Photo: Fotolia