Price trend

According to the data of SunSirs, the average market price of domestic aluminum ingots in East China on August 3 was 18,136.67 RMB/ton, a daily increase of 0.20%, compared with the market average price of 18,316.67 RMB/ton at the beginning of the month (8.1), a decrease of 0.44%, and a decrease of 7.90% compared with the average market price of 19,090 RMB/ton in the same period last year.

Taking the peak in 2021 (October 19, 2021), the average market price of aluminum ingots is 24,240 RMB/ton, and the recent deviation from the peak has dropped by 24.77%. Starting from the recent recovery (December 13, 2021), the average market price of aluminum ingots is 18,693.33 RMB/ton, down 2.44% recently.

Analysis review

After the aluminum price stopped falling and stabilized, it rose slightly. Affected by capital factors in the early stage, in the context of interest rate hikes by central banks, bulk commodities plunged sharply from June to July, and aluminum prices also fell all the way, once falling below 17,500 RMB/ton. Recently, it has stabilized and stabilized, returning to the top of 18,000 RMB/ton.

Macro factors dominated the price trend of aluminum prices in the early stage. As prices gradually approached the cost side, fundamental factors began to rise. Judging from the inventory data, the recent social inventory has begun to show a trend of accumulation, and the previous momentum of destocking has weakened. In terms of production capacity data, from January to July, the newly built production capacity was 1.03 million tons/year, the newly commissioned production capacity was 1.67 million tons/year, the resumed production capacity was 2.579 million tons/year, and the production capacity was reduced by 965,000 tons/year. In the first half of the year, domestic aluminum was supplied, and the capacity utilization rate was relatively high. On the one hand, due to the relatively high price of aluminum ingots in the early stage, the operating profit was better; on the other hand, it was due to the effect of the production capacity ceiling. The output of electrolytic aluminum increased in the first half of the year.

Market outlook

In the short term, the probability of sideways shocks will increase, and the inventory will gradually accumulate, which will suppress the aluminum price to a certain extent. At present, the growth of downstream demand may be difficult to support the operation of high aluminum prices.

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