Aluminum prices fluctuated upward in July
The average spot market price of aluminum ingots in July showed an upward trend, with an operating range of 18,700-19,900 yuan/ton.
On July 30, the average price of domestic aluminum ingots in the East China market was 19,856.67 yuan/ton, an increase of 5.45% from the market average price of 18830 yuan/ton at the beginning of the month.
Based on the average market price of aluminum ingots at the beginning of the year (January 1, 2021) at 15,726.67 yuan/ton as the benchmark price, it has now increased by 26.26%.
The off-season is not short, a list of factors for the firm aluminum price
1. Macro policy factors
The central banks of various countries have implemented super-loose monetary policies, and the overall commodity is in an inflationary trend. The current policy is still in a loose state.
2. Electricity factors affect production capacity
The summer power consumption peak is approaching, and China Southern Power Grid has recently increased its power consumption load. Following the power cut in Yunnan, Guangxi, Guizhou and other provinces have increased their power consumption. The electrolytic aluminum plants in Yunnan Province may be required to raise the previous limit of 25% to 30%. The electrolytic aluminum plants in Guizhou and Guangxi also started small power cuts two weeks ago. Some aluminum companies chose to conduct annual maintenance in advance or reduce the load a little to deal with it. , In July, the power rationing requirements became stricter, and Guizhou enterprises were required to cooperate with the staggered power consumption. The resumption of production after shutdown in Yunnan is almost hopeless in July, with monthly reductions of over 70,000 tons. Guangxi Power Grid issued a notice of orderly power consumption for peak avoidance and load reduction of 3 million million. Among them, the Baise Power Grid reduced the load by 500,000 kilowatts, the Guest Power Grid reduced the load by 300,000 MWh, and the Nanning Power Grid reduced the load by 360,000 kWh. According to the demand for load reduction in various places, the influence of electrolytic aluminum production capacity in the region may exceed 100,000 tons.
3. Dual-carbon policy factors, green economy transformation, demand for aluminum growth
On July 28, according to statistics, the domestic social stock of electrolytic aluminum was 765,000 tons, a decrease of 36,000 tons from the previous week, especially in Shanghai, Wuxi and Nanhai. The unexpected reduction in domestic supply due to "dual control" and power constraints has led to a reduction in annual output (estimated value) from 40 million tons to 39.53 million tons. In the first half of the year, the apparent consumption of domestic electrolytic aluminum was 19.98 million tons, a year-on-year increase of 9.6%.
Negative factors at a glance
1. High aluminum prices, downstream terminals under pressure
The current price is at a relatively high level in the past ten years (see the figure below). Although the downstream terminals are rising, they are currently under pressure.
2. The State Reserve sells reserves to stabilize aluminum prices
The second round of dumping of reserves began. The second batch of dumped reserves was 90,000 tons, slightly lower than the 100,000 tons generally expected by the market. The market expects that the National Reserve will start to dump reserves or by the end of the year, it will be around 50,000 tons per month.
3 The import window opens
In the first half of the year, the apparent consumption of domestic electrolytic aluminum was good and the price difference between inside and outside was superimposed, and the window for the import of aluminum ingots opened.
Forecast
Russia plans to increase tariffs on exported aluminum ingots from August to the end of the year, which will have little impact, but the import window will be closed to a certain extent. It is good for aluminum ingot prices to a certain extent, but August is still in the off-season, and domestic demand is expected to slow down, posing a certain downside risk to aluminum prices.
The current price range of 18500-20000 yuan/ton is a steady-state shock range formed by market games. It is expected that the price of aluminum ingots will continue to be mainly around 19,000 yuan/ton in the near future, and overall, the short-term downside risk will be weakened.
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