Spot aluminum prices move down on the 10th

On November 10, the average price of domestic aluminum ingots in the East China market was 18,516.67 yuan/ton, which was 2.42% lower than the average market price of 18,975 yuan/ton on November 9.

The current aluminum price has fallen below the previous high and fluctuating operating range. At this year's peak (October 19, 2021) aluminum ingot market average price of 24,240 yuan/ton, the recent half-month has dropped by 23.61%. Taking the average market price of aluminum ingots at the beginning of the year (January 1, 2021) at RMB 15,726.67/ton as the benchmark price, the cumulative increase has been reduced to 17.74%.

Influencing factors

1. Social inventory is slightly exhausted

As of November 8, the social stock of electrolytic aluminum was 101.1 tons. Although there was a slight destocking, the overall trend in the near future was tired.

It is reported that the downstream aluminum rod production decreased slightly in October. In October, the domestic aluminum rod output was about 1.2105 million tons, down 4.87% month-on-month and 4.72% year-on-year. During the same period, the social inventory of electrolytic aluminum was greatly accumulated. On the one hand, because the supply of aluminum water was greater than the output of aluminum rods, the proportion of ingots rose; on the other hand, as the price of aluminum ingots rose in the early stage and plunged in the later stage, the market cautiously wait and see.

2. The domestic output increased significantly in the early stage

In terms of output data, according to the National Bureau of Statistics, from January to September, the output of alumina, electrolytic aluminum, and aluminum were 58.84 million tons, 29.15 million tons, and 44.78 million tons, respectively, up by 7.6%, 7.2%, and 10.7 year-on-year. %, an average increase of 2.9%, 5.1%, and 8.8% in two years.

3. The price difference between internal and external prices is obvious in the early stage of domestic import supplement

From the perspective of import and export data, in September 2021, the import of electrolytic aluminum was 96,000 tons, down 9% month-on-month and 44% year-on-year. From January to September, domestic imports totaled 1,124,600 tons, a cumulative year-on-year increase of 46%.

According to data from the General Administration of Customs, from January to September, imports of bauxite and alumina (physical volume) were 81.532 million tons and 2.694 million tons, down 7.2% and 9.4% year-on-year. 1.5%; imports of aluminum scrap and scrap were 636,000 tons, a year-on-year increase of 0.6%; imports of unwrought aluminum were 1.917 million tons, a year-on-year increase of 12.9%. From January to September, the export of aluminum products was 3.943 million tons, a year-on-year increase of 16.1%.

Outlook 

The production and sales were booming in the early stage, and social inventories were running at a low level. After September, social inventories began to accumulate slightly. After the high aluminum ingot price, the downstream price transmission was slightly slow, and downstream demand was slightly reduced. Recently, aluminum prices have fallen, and the downstream is still cautiously waiting and watching, and demand has not improved significantly. Coupled with poor real estate expectations, real estate-related sector products have simultaneously moved downwards. Recently, aluminum prices are relatively weak, and the market outlook will wait and see cost support.

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