First Quarter of 2023 in North America Aluminium Sheet Prices

North America

In the first quarter of 2023, the US Aluminium Sheet Prices experienced a bearish market sentiment attributed to higher inventory levels amidst banking turmoil. This was a result of a decline in new orders, lower output, and efforts to reduce inventories. Despite improved supply chains and weaker demand keeping manufacturing price pressures in check, there was a slight increase in input costs and selling prices due to sustained upward wage pressures and elevated raw material prices. Concerns over higher interest rates aimed at curbing inflation weighed on stock markets and boosted the dollar, rendering dollar-priced metals more expensive for buyers. Aluminium sheet prices decreased in March as banking turmoil eased but remained under pressure due to concerns over tighter credit that could limit economic growth and metals demand. The base metals market was impacted by the long-tail effect of Silicon Valley Bank's failure and the banking crisis in Europe and the US, resulting in market panic and risk aversion. Though demand gradually improved, the pessimistic macro mood led to a fall in aluminium prices. As a ripple effect, the Aluminium Sheet (1100-H14-0.8 mm) prices for Ex New York settled at USD 15039/MT.

Asia Pacific

Aluminium Sheet prices in Q1 2023 experienced a downward momentum in China due to limited downstream construction demand and cautious buyers. China's export tariffs on aluminium rose, but tariffs were reduced to 7.3% in the new year. Aluminium prices were rangebound in early February, with downstream demand steadily recovering. Aluminium Sheet stocks plateaued, and market participants awaited the destocking process. The Federal Reserve's hawkish statements put pressure on nonferrous metals prices, while downstream operating rates and sales increased. Market players indicate that the combination of high aluminium prices, limited increase in downstream construction and housing industry operating rates, and uncertainty over future orders has made downstream buyers cautious about buying. Market concerns over global liquidity and systemic risks increased in March due to the bankruptcy of Silicon Valley Bank and the credit turmoil of Credit Suisse Bank. As a result, Aluminium Sheet prices plunged in March, with Aluminium Sheet (3004-1 mm) prices for Ex Shanghai fixed at USD 2688/MT.

Europe

In the first quarter of 2023, the European Aluminium Sheet market experienced a downward trend due to softening demand and uncertainty about the region's economic outlook. According to the market players, the downstream buyers rushed to secure material in Q4 2022, fearing further price increases, which resulted in a more cautious approach to purchasing. The supply of Aluminium Sheets in the European market remains constrained due to a lack of Russian metal and reductions in domestic capacity. The bankruptcy of Silicon Valley Bank and Credit Suisse Bank's credit turmoil in March added to concerns about systemic risks and global liquidity issues, resulting in rising risk aversion and a battered commodity market. European Aluminium Wire Prices production capacity has been reduced by up to half in the last two years due to skyrocketing power prices, and prices have yet to recover despite capacity cuts and falling power prices. As a ripple effect, Aluminium Sheet (2 mm-AW-2017A) prices for Ex Koblenz settled at USD 10657/MT.

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