Global primary aluminum production at the end of September 2022 was 1.1% higher than a year earlier. In China, production was 2.5% higher; North American production was down 4.4%. The sharp rise in energy costs led to an 11% decline in Western European production. Compared withAugust 2022 global primary aluminum production shrank across all regions by in total 3.2%. Consequently, aluminum prices continued to develop weak. However, for 2022, we still expect an output of 67.8 million tons. Added to this will be around 13 million tons of recycled aluminum. An higher aluminum use than in 2021 is still seen in Automotive and also in the Aerospace industry.
Stocks on the LME increased sharply to 587,000 t in October. This month-end level is 76% higher than that in September. Aluminum inventories on the SHFE increased only slightly. Investment demand decreased by almost 13% compared to September 2022.
Trend: By the end of 2022, we see primary aluminum prices in a band of +US$500 around the US$2,300/t mark, with those of aluminum alloys up to US$500/t lower.
From January to August 2022 the zinc mine production was 2.6 % lower than in the same period of the previous year. Refining production also decreased by 2.6 %. This was due to reduced activity by European producers as a result of the enormous rise in energy prices. Zincconsumption was 3 % lower mainly driven by a lower usage in China due to decreased activity in major zinc consuming sectors because of restrictions after new COVID-19 outbreaks. In the medium term, we expect a strong recovery for the zinc demand: The usage will equal 14.4 million tons in 2025.To fulfill this needs, a further increase in zinc recycling is necessary.
Zinc inventories on the LME decreased to 45,525 t; those on the SHFE increased to 44,400 t. The volumes of 3,000 t on the Comex are negligible. Stocks now correspond to only 2.4 days' consumption. Zinc supply therefore is very tight and it exists a risk for high price volatility.
Trend: For the zinc price, we see a movement of +US$700 at a level of 3,100 US $/t.
