Aluminium Market Update – September 2022

Macro Economy

The manufacturing Purchasing managers’ Index (PMI) in August was 49.4 percent, which is below the critical point and up 0.4 percentage points from the previous month. In terms of enterprise size, the PMI of large enterprises was 50.5 percent, up 0.7 percentage points from last month, returning to above the critical point. The PMI for medium-sized enterprises was 48.9 percent, up 0.4 percentage points from the previous month and below the critical point. The small business PMI was 47.6 percent, down 0.3 percentage points from the previous month and below the critical point.

The manufacturing Purchasing managers’ Index (PMI) in August was 49.4 percent, which is below the critical point and up 0.4 percentage points from the previous month. In terms of enterprise size, the PMI of large enterprises was 50.5 percent, up 0.7 percentage points from last month, returning to above the critical point. The PMI for medium-sized enterprises was 48.9 percent, up 0.4 percentage points from the previous month and below the critical point. The small business PMI was 47.6 percent, down 0.3 percentage points from the previous month and below the critical point.
In order to improve financial institutions’ ability to use foreign exchange funds, the People’s Bank of China (PBOC) has decided to cut the reserve requirement ratio (RRR) for financial institutions by 2 percentage points, or 6 percent from the current 8 percent, starting from September 15, 2022.

Aluminum Corporation of China reported a net profit of 570 million USD in the first half, up 28.93 percent year on year. Intends to acquire 100% equity of Pingguo Aluminum Industry Co., LTD in cash by means of private agreement transfer.
Mingtai Aluminum released the 2022 semi-annual report, the company reported operating revenue of 2.21 billion USD, a year-on-year increase of 43.87%; The net profit attributable to the shareholders of the listed company was 156 million USD, up 29.19% year on year.
As of August 26, 1.03 million tons of electrolytic Aluminum production capacity had been suspended in Sichuan and Chongqing due to power limit by high temperature.

According to the latest data released by Shanghai HNA Stock Exchange on September 2, Shanghai Export container Freight Index (SCFI) fell 306.64 points last week, falling below 3000 points level to 2847.62 points, the lowest since the middle of April last year, the decline expanded to 9.72%, the biggest weekly decline since the epidemic for two consecutive weeks. The price per TEU on the European line fell $189, or 4.26%, to $4,252, the lowest since late April. The Mediterranean Line fell $297 per TEU, or 5.85%, to $4,774; The South American line (Santos) per TEU fell $847, or 9.59%, to $7,981; The Southeast Asia Line (Singapore) was $562 per TEU, down $29 or 4.91 per cent on the week.
Alphaliner TOP 100 / 08^th September, 2022

Driven by the resumption of production in Brazil and Argentina, the output of aluminum ingot in South America increased by 10% year on year to 710,000 tons in the first seven months of 2022. South America will see the biggest increase in overseas aluminum production this year, as production in Brazil and Argentina continues to recover steadily.
On September 1, Norsk Hydro held a groundbreaking ceremony for a new recycled aluminum plant in Hungary with a capacity of 90,000 tons per year, which is expected to start production in the first quarter of 2024 to produce aluminum alloys for the automotive industry.
EU wide capacity reductions have started in France (Dunkrik smelter), Norway (Hydro) and recently also Germany (Speira). This added to Rumanian capacity reduction shows a general trend which is expected to lead to supply limitation once the high inventories are reduced.
India’s metals producers are accelerating their transition to renewable Energy following a coal crisis that has tightened supply and rocketed fossil fuel prices, according to renewable Energy company Greenko Energy.

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LODEC SHANGHAI TEAM