The recent few years have seen significant fluctuations in the aluminium price trend, which are attributed to a variety of factors such as global economic conditions, political disputes and technological developments. However, during 2024 we have witnessed several identifiable forces that have caused aluminium prices fluctuations.
Current Aluminium Price in India
Before we look at the driving factors, it is crucial to know where the prices of current aluminium price. Though difficult to make definitive predictions some insights can be gleaned from recent market moves. By February 2024 the Aluminium-International prices was up decreased from 2259.5 USD/MT in December 23 to 2202.9 USD/MT in March 24.
Factors Potentially Dampening Prices
Despite this bearish aluminium price trend, the aluminium price trend in India and globally will depend on various factor mentioned below.
- Fluctuation in Production Levels: Aluminium production worldwide will play a significance role in the to balance the supply demand scenarios. China which is the largest world producer might increase aluminium production as their economy is showing recovery from various crisis. Therefore, oversupply could drag prices down.
- Global Economic Slowdown: Concerns about a worldwide economic slowdown are on the increase. Reduced economic activity could reduce the amount of aluminium used in various industries, such as building and transportation. This would result in an excess supply of aluminium and can result in downward aluminium price trend.
- Geopolitical Tensions: The current Russia-Ukraine war has affected supply chains and caused instability in the aluminium price trend in India and globally. However, unless the conflict directly affects major production facilities, its long-term impact on prices may be limited.
- Substitute Materials: There is competition for aluminium by alternative materials like steel and composites. Any progress made regarding these other options or even any substantial reduction in costs associated with them might lead to consumer preference change thus impinging on aluminium demand as well as its price.
Additional Considerations
Energy Costs: Aluminium production demands high energy levels. Variations in energy charges especially can bring changes in production expenses which may ultimately push down aluminium price trend.
Sustainability Concerns: Pressure from stakeholders to adopt more sustainable practices is increasing within the aluminium industry. In the short run, this could increase production costs but it might also create a premium market for “green” aluminium which will have an effect on overall price dynamics.
Conclusion: A Juggling Act
The predicts for aluminium prices are not clear. It was a bearish time at the beginning, but the above factors indicate that there may be some price corrections in the second half. The ultimate determinant of this path is the interplay between supply and demand, economic conditions and geopolitics.
