Aluminium prices fell -1.17% yesterday, setting at 202.5, driven by a variety of factors, that include China’s significant rise in unwrought aluminium imports in 2023. Not quite matching the record set in 2021, China’s imports more than doubled yoy to reach 1.54 million metric tonnes. The 2nd-highest annual total since the turn of the century.
The sharp increase in imports is a reflection of China’s strong need for primary metal. Surprisingly, the Caixin China General Production PMI for January stayed at 50.8. Indicating that factory activity has increased for three months running.
In contrast, official data showed that the manufacturing sector was strengthening ahead of the Lunar New Year celebration.
In contrast, primary aluminium imports into Japan decreased by 26% to 1.03 million metric tonnes in 2023—the lowest amount since at least 1986.
Sluggish demand in the manufacturing and construction sectors is the reason for this decline. As the region’s largest importer of aluminium, Japan establishes the benchmark premiums for primary metal shipments over the cash price set by the London Metal Exchange (LME).
Technically, the market for aluminium is seeing new selling, as indicated by a 0.57% rise in open interest that settled at 3887. Support for aluminium is at 201.8, and a break below that could push the metal to 201.1 levels.
Aluminium Price resistance is expected at 203.7, and a move above it could push prices as high as 204.9. For more information about the dynamics of the aluminium market. Traders are keeping a close eye on regional benchmarks, import trends, and manufacturing activity throughout the world.