Industry giants cope with falling aluminum prices

IAI announced on March 26 the total global aluminum inventory in February. According to the data, the global aluminum inventory in February increased by 19,000 tons to 2.321 million tons. Although slightly lower than the 2.89 million tons in the same period of 2012, it still increased by 19,000 tons.

Aluminum stocks in the London Metal Exchange also show that, as of yesterday, the inventory totaled 5,239,150 tons, the highest since December 21, 2012.

In addition, the China Development and Reform Commission also recently released data on the prices of ten non-ferrous metals in the country in January-February this year. The production of electrolytic aluminum and alumina increased by 15% year-on-year, which was higher than that of other major non-ferrous metals such as copper, lead and zinc, and prices of other metals except electrolytic aluminum rebounded.

“In recent years, the blind expansion of upstream manufacturers and continuous production increase have caused the production capacity of electrolytic aluminum to be in a state of serious surplus. On the other hand, the domestic economy is not ideal and the growth rate of economic development has slowed down, which makes the aluminum industry The living environment has become even worse, which has also increased the market's vicious competition and also made the price sluggish," said Luo Min.

According to statistics, Lon Aluminum has fallen since July 2008's high of US$3,381/ton, and in February this year saw a wave of larger declines. The current price has remained at around US$ 1900/ton, a drop of over 40%.

On March 22, National Aluminum Corporation, the third largest primary aluminium producer in India, officially lowered the domestic aluminum price by Rs 2,000/t (approximately US$37/t) to comply with the global aluminum price decline.

However, the market has also noticed the dilemma of the aluminum industry. According to a Reuters news report on March 25th, China and Russia, the two largest aluminum companies, China Aluminum (Abbr.: Chinalco) and Rusal Aluminum Union (abbreviation: Rusal), have signed a memorandum of understanding on investment in the aluminum industry. The development of aluminum mines and other aspects reached a cooperation intention to jointly cope with the current problem of excess capacity.

Chinalco is China's largest producer of alumina, primary aluminum and aluminum processing materials, and RUSAL is the world's largest aluminum producer. According to industry insiders, if the two aluminum giants can deepen their businesses and work together, they will have a positive impact on the development of the global aluminum market.