High cost of recycled aluminum alloy ingot market


In the second week of March (8-10), Shanghai aluminum continued to plunge, in the aluminum industry has opened a deep hole in the mind. After that, Shanghai Aluminum experienced a short-term shock. With the help of the reduction of electrolytic aluminum and aluminum bar social inventory, Shanghai Aluminum rebounded strongly recently and stood at 23,000 yuan/ton mark. In contrast, THE ADC12, Shanghai aluminum slump showed its strong resilience, now Shanghai aluminum continues to rebound, but shows a weak rise, so that the renewable aluminum industry confused. March has passed the half of spring, so how will the price of ADC12 change in the future?
Primary aluminum continues to drive up ADC12 costs
Since the beginning of this year, Shanghai aluminum price is about 1100 yuan/ton higher than ADC12 price. Shanghai aluminum experienced a sharp fall during the period, and now stands at 23,000 yuan/ton mark, the price difference again pulled up to 1100 yuan/ton. According to Mysteel cost estimation, the current ADC12 cost in the industry is 22,000-22,500 yuan/ton (tax included). Affected by the epidemic in some areas, the shortage of waste aluminum pushes the ADC12 cost to a higher level.
Downstream demand decline price downward transmission is not smooth
Although the shortage of domestic scrap aluminum has been increasing since 2019, driving the cost of ADC12, its price center has also been moving upward. Since the beginning of this year, with the downturn of the automobile industry, oEMS orders continue to decline, leading to enterprises in the compression of capacity. According to the quotation of Mysteel China recycled aluminum alloy ingot, supported by the cost, the quotation in various regions is around 22100-22300 yuan/ton. But from the market situation of research, the overall transaction is very few, occasionally just need to clinch a deal, its bargaining space is bigger than normal. One southwest area manufacturer said: at present this stage is not the price of the problem, but demand. Because of the reduction of production capacity of oems, the upward transmission to many parts enterprises to reduce production, coupled with the impact of the epidemic in various regions, the whole recycled aluminum industry, at this stage, orders are few and far between. Go on like this, the regeneration of aluminum enterprises will also set off a wave of reduction.
The pressure of finished product inventory increases and the industry has the conditions of furnace shutdown and production reduction
Prices have risen a lot since 2022, but for most people in the recycled aluminum industry, there is not much joy. There are three weekdays in February. In the first week, there was almost no transaction. In the second week, the industry took the initiative to reduce the price and deliver the order before the New Year. It was not easy to usher in Yangchun March with expectations. In the second week, primary aluminum plunged, causing panic in the industry. Nowadays, the downstream buying is not good, and the inventory of finished products is gradually piled up. Most of the business people have only one idea, which is to sell the goods normally, even if the capital is protected. Even some enterprises can not bear the high cost of capital pressure, choose to take the initiative to shut down part of the furnace. Now the original aluminum upward power still exists, in the high cost, price downward transmission pattern is not smooth, alloy ingot enterprises reduce the phenomenon or gradually appear.
Conclusion: High cost and low profit have been plaguing the recycled aluminum industry. At the present stage, the downstream die casting demand is depressed, the peak season can not be realized, and the downward transmission of ADC12 price is not smooth, and the market is under pressure. Looking forward to the future market, there are two possible outcomes: 1. There is no favorable policy level, and the pattern of high cost will lead to a continuous downturn in downstream demand. 2. High level consolidation of primary aluminum reverses downward, cooling the cost end, stimulating the downstream die casting industry to resume production. However, in my opinion, I prefer the second outcome, because the best regulation, ultimately depends on the market itself to adjust.

And all the things shows that the cost higher is the inevitable trend . So that if you need any aluminum sheets .tubes ,all need order asap.Lose one second, lose money.

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