Monthly Aluminum Price Index Rises as China Ends Export Taxes

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MetalMiner’s aluminum price index, the monthly Aluminum MMI®, registered a value of 90 in May, a significant increase of 2.3% from 88 in April.

Aluminum_Chart_May-2015_FNL

Aluminum on the London Metal Exchange is back above $1,900 per metric ton, breaking short-term resistance to hit a four-month high.

China Ends Export Taxes

China erasing aluminum export taxes didn’t seem to weigh down on prices; however, aluminum premiums took a beating when the news of China’s removal of export taxes came.

As my colleague Stuart Burns wrote in a recent article, the tax removal should reduce the domestic surplus of metal, supporting domestic prices and depressing prices in overseas markets. With current primary production counting for about 75% of total primary capacity, Chinese producers will have the ability to increase production without creating any shortages in China’s domestic market.

Even outside China, production has been ramping up over the past six months. UC Rusal and Alcoa, Inc. have responded by closing older and less-efficient capacity, but even so, both they and other primary producers are investing in new capacity at the same time. Demand for aluminum remains robust, but the excess of supply is something that is clearly bugging aluminum producers.

Certainly, the supply outlook doesn’t explain the recent price increase. However, the recent weakness in the dollar does. The dollar index is experiencing some turbulence for the first time in more than nine months and that supported aluminum and most industrial metal prices in April.

Battery Research Continues

In other aluminum news this month we also had Stanford University  building an aluminum-ion battery prototype that offers various improvements over lithium-ion batteries. These aluminum-ion batteries will potentially make consumer electronics safer, charge faster and allow thinner or even flexible-form factors.

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It was a strong month for the cash price of primary Indian aluminum. The metal posted a 7.4% increase, finishing at $1.91 per kilogram. After rising 6.8%, the cash price of primary aluminum finished the month at $1,910 per metric ton on the LME. The aluminum 3-month price closed the month at $1,904 per metric ton after gaining 6.4% on the LME.

Last month, Korean 1050 aluminum sheet prices dropped by 2.1% to $3.46 per kilogram. Korean 3003 coil premium over 1050 sheet fell a slight 2.1% over the past month to $3.51 per kilogram. Korean 5052 coil premium over 1050 sheet fell 2.0% to $3.65 per kilogram. The cash price of Chinese aluminum fell a slight 0.9% over the past month to $2,118 per metric ton. The value of European 5083 plate weakened by 0.9% this month, settling at $3,269 per metric ton. Chinese aluminum billet prices decreased by 0.8% this month, ending at $2,121 per metric ton. The price of Chinese aluminum scrap drifted 0.8% lower to $2,015 per metric ton. At $2,874 per metric ton, European 1050 aluminum was down 0.5% for the month. Chinese aluminum bar fell a slight 0.1% over the past month to $2,245 per metric ton.

The Aluminum MMI® collects and weights 12 global aluminum price points to provide a unique view into aluminum price trends over a 30-day period. For more information on the Aluminum MMI®, how it’s calculated or how your company can use the index, please drop us a note at: info (at) agmetalminer (dot) com.

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