January 18, 2023

An expected revival in China’s real estate sector this year comes just as the country produced a record amount of aluminum last year. AEGIS notes that this expected pick-up in aluminum demand is likely due to the real estate-related economic stimulus measures the Chinese government implemented earlier this month. The recent aluminum supply growth was mainly due to loosened restrictions on electricity usage, as well as new smelters being brought online. The country produced 40.21 million mt aluminum in 2022, according to government data. (Source: S&P Global Insights, Reuters)

Last year, global aluminum prices and demand fell mainly due to the pandemic and supply-chain issues. However, aluminum prices could rally this year if China’s demand increases.  Aluminum end-users that are concerned about increasing prices could consider buying swaps or call options, as either would establish a maximum aluminum price. Such positions are standard for consumer hedging; however, they can result in opportunity costs or cash costs if metal prices decrease. Please contact AEGIS for specific strategies that fit your operations. (1/18/2023)

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Price Indications

Today's Charts

AEGIS Insights

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1/13/2023: Thousands march in Peru capital demanding president step down

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