Aluminium Prices: Steady in Q3 Amidst Robust Demand

The global aluminium market has remained resilient in the third quarter, with aluminium prices holding steady despite fluctuations in other commodity sectors. As per the assessments by Platts, a division of S&P Global Commodity Insights, the quarter premium for Japanese imported primary aluminium remained unchanged at $127.50/mt, in addition to the London Metal Exchange (LME) cash price on August 3. This article delves into the factors contributing to this stability and how the market has fared in Q3.

Robust Demand and Stable Premiums

Robust demand from various industries, including automotive, aerospace, and construction, has supported aluminium prices. The ongoing shift towards lightweight materials in these sectors has bolstered the demand for aluminium, keeping the premiums steady. The Platts specifications for quarterly settlements on a CIF main Japanese port basis negotiated between unaffiliated counterparties for P1020/P1020A 99.7% primary aluminium ingot have contributed to this stability.

The aluminium recycling industry has also played a vital role in mitigating price volatility. Recycling aluminium consumes significantly less energy than producing it from raw materials, making it an eco-friendly and cost-efficient option. As a result, the recycling sector has flourished, contributing to the overall supply of aluminium and helping to stabilise prices.

Assessments and Concluded Settlements

The Q3 assessment of $127.50/mt for Japanese imported primary aluminium was based on seven concluded settlements. These settlements, totalling 7,400 mt/month, were reported between July 5 and August 3. Cash payments were made for documents and volumes traded under annual contracts, indicating strong regional demand for aluminium.

The price of aluminium scrap also plays a crucial role in influencing the primary aluminium market. As recycling continues to gain traction, the demand for scrap aluminium increases, impacting the availability and cost of primary aluminium. A stable scrap market influences primary aluminium prices, contributing to a more predictable and reliable aluminium market overall.

In conclusion, aluminium prices have exhibited resilience in the third quarter, with the quarter premium for Japanese imported primary aluminium remaining constant at $127.50/mt. Industries’ robust demand and aluminium recycling’s strong contributions have bolstered the market’s growth significantly. The concluded settlements under annual frame contracts have provided stability to the market, assuring a steady supply of aluminium. As the global economy continues to recover, it remains essential for industry stakeholders to monitor the dynamics of aluminium prices closely. Therefore ensuring sustainable growth and economic stability in the long run.

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