This is primarily due to a slowdown within the Chinese economy, notably within the troubled property and construction industries and the economic deceleration in the world's large economies.
Analysts foresee a persistent surplus of the metal throughout 2024, like in 2023 at the end, which was around 800,000 tonnes. It is anticipated that sustained downward pressure on prices will be exerted, given the prevailing weakness in demand.
The research arm of Kenanga Investment Bank stated, "We acknowledged that contrary to expectations, China’s reopening has not significantly boosted the demand for aluminium.
"While the Chinese government has introduced various measures to stabilise the property market, a meaningful recovery is still not quite on the horizon."
The research firm highlighted an uptick in demand for aluminium in China's solar sector, electric vehicles (EVs), and transmission infrastructure.
It also emphasised that stricter green regulations, particularly in China, may permanently close smelters operating on fossil fuel, further tightening the global aluminium supply.
Furthermore, Western nations are expected to persist in avoiding Russian aluminium, which constitutes approximately 6 per cent of global aluminium production.
