The aluminium front month contract demonstrated great resilience in 2020 by recovering quickly from the impact of Covid-19 on consumption that caused the price to hit an annual low of $11,560 yuan ($1,773) per tonne on March 30.
It maintained the recovery in the second quarter and has moved up dramatically since late September, supported by stronger demand post-lockdown and relatively low inventory. The SHFE aluminium contract
soared to a nine-year high of 17,000 yuan per tonne on December 2 before recently retreating slightly to 16,000 yuan per tonne level.
Seasonality, demand trends support outlook
Notwithstanding the impact of Covid-19 on China’s aluminium industry in 2020, the quarterly average SHFE aluminium daily closing price has been higher in the second quarter than in the first quarter every year since 2015.
The SHFE aluminium daily close averaged 14,032 yuan per tonne in the second quarter...