Sentiment in German boardrooms deteriorated further in August. But in China, too, concerns about economic development amid new lockdowns are driving investors' expectations. The recessionary mood left the price of the aluminum 3-month contract on the London Metal Exchange trading in a comparatively narrow range of USD 2,339/t to USD 2,527/t at an overall low level.

As in the previous month, inflation rates in the USA and Europe remained at a historically high level of over 9 percent. In addition, the global economic outlook continued to deteriorate. Growth in the manufacturing sector in the People's Republic of China also fell short of expectations.

Cooling global manufacturing growth, historically high inflation rates such as in the U.S. and Europe, and rising interest rates dampened investors' economic expectations last month.

The zero-covide strategy in the People's Republic of China and the associated lockdowns and the effects on consumption there remained one of the dominant topics in the aluminium market in May. In the country, which is considered the largest sales market for European car manufacturers, new car sales fell by over 40% compared to the previous year. Which is why the worry lines are growing as we look at the domestic economic development. 

In April, the aluminum market was dominated by three issues. Firstly, the Russia-Ukraine war continued and Russia halted gas supplies to some Eastern European countries, and secondly, the People's Republic of China's zero covid strategy caused lockdowns in the most populous cities of Shanghai and Beijing. In addition, the US dollar rose to a five-year high and put pressure on the price of aluminum.

Every day we follow the horrific developments in the Russia-Ukraine war. Even though the focus is on the terrible acts of war and the human tragedies, we try to summarize the events and effects on our industry. During the month, the aluminum price traded in a wide range from USD 3,220/t to USD 4,074/t, its highest level ever.

All diplomatic efforts unfortunately failed to prevent an escalation in the Russia-Ukraine conflict in February. After Putin initially recognized the pro-Russian separatist areas as independent republics, he launched an attack on Ukraine a day later. As a result of the escalation, the aluminum 3-month contract on the London Metal Exchange was quoted at its highest level ever.

In January, the aluminum market found itself caught between a number of different issues. On the one hand, the world was concerned about the escalating Russia-Ukraine conflict. Another concern is that of increasing inflation, which is why the U.S. Federal Reserve announced that it would be scaling back bond-buying programs and raising interest rates. On the other hand, market participants tried to hedge aggressively with primary aluminum volumes at the start of the year. 

As expected, a very volatile month lies behind us. After the price slump in October, the LME aluminum quotation found support at USD 2,550 per ton in November. In the course of the month, the aluminum 3-month contact traded in a range of USD 2,510 per ton to USD 2,747 per ton.

The price losses of the energy-intensive light metal were associated with an easing in the energy market. In addition, declining economic data and rising corona case numbers in China, led to a wave of profit-taking among institutional investors. Detached from the analysts' medium- and long-term forecasts, it is necessary to differentiate between the various aluminum products and their physical availability, especially in the short term.

In September, the aluminum 3-month contract on the London Metal Exchange broke through the USD 3,000/t mark for the first time in 13 years. Over the course of the month, the aluminum price traded in a range of USD 2,661/t to USD 3,000/t.

As in previous months, production restrictions in some Chinese provinces to meet set climate targets had a price-driving effect. In addition to profit-taking by financial market participants, the announcement of the default of the Chinese real estate giant Evergrande caused additional volatility.

Global raw material and energy prices continued to rise in August. The aluminum 3-month contract on the London Metal Exchange rose to a new 10-year high.

During the month, the aluminum price traded in a range of USD 2,516/ton to USD 2,726/ton. On the Shanghai Future Exchange, the aluminum contract even approached a 14-year high. Production cuts in some Chinese regions to meet energy targets continue to fuel price developments despite the release of state reserves.

In July, the aluminum market continued to face a positive market environment. The dominant issues remained the low interest rate policy of the US Federal Reserve (FED), the supply cuts in China and the Russian export tax on aluminum products. Consequently, the aluminum 3-month contract on the London Metal Exchange traded in a range of USD 2,416/t to USD 2,642/t over the course of the month.

The spread of the delta variant of the coronavirus in parts of Europe and Asia caused interim price corrections due to profit-taking. However, as no strict restrictions on economic activities are currently foreseeable, market participants do not expect any change in the bullish price outlook despite the spread of the delta variant.

The month of June was characterized by two major events: Firstly, the interest rate decision of the US Federal Reserve (FED) caused the US dollar to rise significantly against other currencies.

And secondly, Russia announced that it would levy an export tax on aluminum and other metals of 15% from August 1.

In May, too, there was no easing on the commodity markets - the bulls continued to dominate events despite a significant correction in the middle of the month.

The focus last month was particularly on statements by the Chinese government. China signaled that it wanted to take tough action against speculators, who additionally fuel the price development of commodities.