The market in the metal industry is constantly evolving – and so are commodity prices. The IKB Deutsche Industriebank releases a quarterly report focusing on the stocks and prices of aluminum and zinc. The most significant developments in the third quarter of 2024 are highlighted in the current report.
Aluminium developments and forecasts
By the end of July 2024, global primary aluminium production was 3.8 per cent higher than in the same period of the previous year. China recorded the strongest increase at 4.9 per cent. The rest of Asia and North America also recorded high growth rates of around 4 per cent each, while Western European production recovered only slowly at 2.3 per cent.
Stocks developed unevenly on the stock exchanges in August 2024. While stocks in SHFE warehouses rose by an average of 9.7 per cent during the month, inventories on the LME continued to fall following the sharp increase in May and were 8.7 per cent lower at the end of the month than at the end of July.
The monthly average price for primary aluminium was almost unchanged compared to the previous month, but was able to almost completely make up for the declines suffered in July by the end of the month. The monthly average price for recycled aluminium rose once again, but was 2.6 per cent lower at the end of the month than at the end of July.
Overall, the significant increase in global aluminium consumption in the second quarter has had a price-supporting effect in recent months, resulting in only a marginal supply surplus for primary aluminium at the end of the first half of the year.
Trend: We expect the primary aluminium price to move by USD 300 plus or minus around the USD 2,500 per tonne mark by the end of the year; the gap to aluminium alloy should gradually widen again to a good USD 300 per tonne; we only see more upside potential in 2025.
Zinc developments and forecasts
Following a decline of around 2 per cent in 2023 as a whole, global zinc mine production fell by 3.4 per cent in the first half of 2024 compared to the same period of the previous year. Production declined in Canada, China, South Africa and Peru in particular, as well as in Ireland and Portugal, while Australia, Brazil, Mexico and Sweden recorded higher production. In contrast, refined metal production was almost unchanged year-on-year in the same period, although there were regional shifts.
Global zinc consumption rose by 3.4 per cent to 6.7 million tonnes in the same period, driven by higher demand in Brazil, China and the rest of Asia, while consumption in Europe and the USA fell. As a result, there remains a slight supply surplus of 0.2 million tonnes. Zinc inventories on the LME rose by 3.6 per cent in August 2024 following the decline in the previous month. Inventories are therefore almost 60 per cent higher than the previous year's figure.
On the SHFE, however, zinc inventories fell by more than 20 per cent over the course of August to around 84,600 tonnes at the end of the month. The monthly average zinc price was 2.3 per cent lower than the previous month, although rumours that Chinese production would be cut back due to tight margins led to a rise in prices by the end of the month.
Trend: We see the zinc price moving around the USD 2,800 per tonne mark in a range of plus or minus USD 500 until the end of Q3 2024.
