Profitable:
1. The recent news has continued to interfere. The Australian Tomago aluminum plant may face the risk of production cuts due to the isolation of employees. The aluminum plant is located in New South Wales and is Australia’s largest aluminum smelter with an annual production capacity of 590,000 tons.
2. Guangxi clearly proposed plans to implement peak avoidance of electricity for electrolytic aluminum enterprises in the whole district, requiring that the average load of electricity consumption be reduced by more than 30% before August 15, 2021. It is predicted that the scale of production reduction will reach 450,000 tons. In combination with the previous Inner Mongolia, Yunnan, Henan and other places, the current plant has stopped production, with a production capacity of about 2.1 million tons. The market’s expectation of tight supply in the second half of the year has increased significantly.
Bad:
1. The impact of power curtailment on processing enterprises has also begun to manifest. On August 7, 2021, large-scale industrial enterprises in some areas of Henan Province will limit power consumption by 50% according to the situation, and all industrial enterprises below ten kilovolts will stop production. Most companies reported that the current power curtailment will last about 3 weeks. The current power curtailment is expected to affect the operating capacity of aluminum plates, aluminum coils, aluminum strips and aluminum foils totaling 2.085 million tons. During this period, the purchase of raw materials is expected to be reduced by 100,000 to 120,000 tons.
2. Last Thursday, SMM calculated that the domestic electrolytic aluminum social inventory was 739,000 tons, a small increase of 7,000 tons compared to the previous Thursday. The Wuxi and Nanhai regions became a little tired during the week, mainly because the shortage of goods in Wuxi has eased compared with the previous period. . At the same time, the third batch of dumping nodes is approaching. If the dumping quantity is too large, prices will be significantly suppressed. However, there are recent rumors that due to the epidemic, the time for dumping reserves may be delayed.
Summary: The supply side has been disrupted recently, and the market’s expectations of tight supply have risen. The power curtailment has led to an increase in industrial electricity prices in some areas, and at the same time caused alumina companies in some areas to reduce production, and the production cost of electrolytic aluminum has also risen significantly. On the consumer side, although aluminum processing companies in Henan have reduced or stopped production to varying degrees, which will have a certain impact on aluminum ingot consumption in the short term, they are actually more of a digestion of finished product inventories. Considering that the peak consumption season of “Golden Nine and Silver Ten” is approaching, the demand for replenishment of processing enterprises has increased. Under the change of supply and demand pattern, aluminum prices are likely to rise but never fall.
Operation strategy:
Macro risks still exist, the supply side continues to be tight, cost support rises, consumption will have a slight short-term impact, and aluminum prices remain strong. The 09 contract is expected to fluctuate in the range of 19800-20600 yuan/ton next week. It is recommended to do more on dips. Selling hedging companies can reduce their hedging positions on dips.
一 market review
Shanghai Aluminum showed a strong volatility this week, and the price once again returned to above 20,000 yuan/ton. At the beginning of the week, the decline in the social inventory of electrolytic aluminum was significantly narrowed, and the price fell slightly. After Guangxi issued a 30% limit on the production of electrolytic aluminum enterprises in the region, the bullish sentiment was ignited again, and prices continued to rise. Approaching the weekend, social inventories increased slightly, some bulls chose to leave the market at a profit, and prices fell slightly. From a technical point of view, multiple moving averages are headed up, showing an obvious long-term arrangement. The short-term aluminum price is likely to fluctuate at a high level. The short-term aluminum price is expected to operate in the range of 19,500-20,600 yuan/ton.
Aluminum busbar
二 Analysis of price influencing factors
1. International macro: US economic data is generally improving, and consumer confidence unexpectedly declines
U.S. economic data is generally positive, but the unexpected decline in consumer confidence indicates that there are still concerns about economic recovery.
The US Senate approved the 1 trillion infrastructure bill and 3.5 trillion spending plan. Fiscal stimulus is expected to strengthen, but the follow-up still needs to be passed by the House of Representatives.
Many Fed officials believe that the conditions for debt reduction are approaching, and the Fed’s announcement of its debt reduction plan may be approaching.
The turmoil of the epidemic continues, and European economic data has slowed down slightly.
In general, the development of the epidemic and the Fed’s debt reduction plan are expected to bring pressure to the market, while the US fiscal easing is expected to bring support to the market; from the market reaction, the current sentiment tends to be optimistic, but we still need to pay attention to fiscal and monetary policy and Uncertainties brought about by the epidemic.
2. Domestic macro: The industrial production boom in July weakened, and the year-on-year growth rate has slowed down
The manufacturing PMI of the Bureau of Statistics declined slightly in July, of which the production PMI was 51.0%, which was 0.9 percentage points lower than the previous month, and hit a new low since March 2020, mainly due to extreme weather and steel production restrictions. From the high-frequency data point of view, the main production indicators in July were weaker from the previous month. The operating rate of the blast furnace on July 30 was 57.04%, which was 3.35 percentage points lower than that on June 25; the PTA operating rate also increased from 81.7% on July 1 It fell back to 73.1% on July 30; in terms of steel output, crude steel output fell 7.1% month-on-month in the first half of July.
The National Energy Administration pointed out that in July, China’s economy continued to recover steadily, and the electricity consumption of the whole society continued to grow, reaching 775.8 billion kWh, an increase of 12.8% year-on-year, an increase of 16.3% over the same period in 2019, and an average increase of 7.8% in two years. In terms of industries, the power consumption of the primary industry was 10.2 billion kWh, a year-on-year increase of 20.0%; the power consumption of the secondary industry was 506.8 billion kWh, a year-on-year increase of 9.3%; the power consumption of the tertiary industry was 142.2 billion kWh, a year-on-year increase of 21.6 %; The electricity consumption of urban and rural residents was 116.6 billion kWh, an increase of 18.3% year-on-year.
National Development and Reform Commission: National coal production has increased significantly, demand has continued to fall, and coal supply from power plants has exceeded coal consumption; dispatch data shows that on August 10, the national unified coal supply from power plants was 7.4 million tons, a record high in summer, an increase of nearly 60% from the previous normal level. 10,000 tons; coal consumption is 7.2 million tons, nearly 300,000 tons lower than the peak; it is expected that in the later period, as coal production capacity is gradually released, output will continue to increase, and the coal supply and demand situation will further improve.
National Development and Reform Commission, National Energy Administration: Encourage renewable energy power generation companies to build their own or purchase peak-shaving capacity to increase the scale of grid connection; in addition to the grid companies assuming the responsibility for guaranteed grid connection of renewable energy such as wind power and solar power, there is still room for investment and construction willingness Renewable energy power generation companies are encouraged to build their own energy storage or peak shaving resources on a voluntary basis to increase the scale of grid connection. For renewable energy power generation companies that require energy storage or peak shaving capacity in accordance with the prescribed proportions, after the grid companies have identified them in accordance with the procedures, they can arrange corresponding installations and grid connections.
3. Inventory situation: the electrolytic aluminum inventory has accumulated 7,000 tons on a weekly basis
On August 12, the domestic social inventory of electrolytic aluminum: 72,000 tons in Shanghai area, 26.8 tons in Wuxi area, 200,000 tons in Nanhai area, 84,000 tons in Hangzhou area, 33,000 tons in Gongyi area, 65,000 tons in Tianjin, and 30,000 tons in Chongqing. Linyi is 14,000 tons, with a total of 739,000 tons of aluminum ingots in the consumer area. During the week, Wuxi and the South China Sea became a little tired, mainly because the shortage of arrivals in Wuxi has eased compared with the previous period. At the same time, the aluminum price fluctuated during the week and the downstream just needed out of the warehouse shrank slightly. goods.
4. Positions held: the amount of positions held has increased significantly
As of August 13, the Shanghai Futures Exchange had 509,741 aluminum holdings, an increase of 25,691 from 484,050 last week. The price of aluminum fluctuated strongly this week, and the total holdings increased significantly.
Conclusions and recommendations
Macro risks still exist, and news continues to interfere. Domestic and international electrolytic aluminum is affected by factors such as the epidemic situation and power curtailment, and the supply side is expected to continue to be tight. The short-term impact on the consumer side is greater, and social inventories remain slightly accumulated. However, the peak consumption season “Golden Nine and Silver Ten” is approaching, and it is expected that the short-term aluminum price will fluctuate strongly.
Strategy
Macro risks still exist, the supply side continues to be tight, cost support rises, consumption will have a slight short-term impact, and aluminum prices remain strong. The 09 contract is expected to fluctuate in the range of 19800-20600 yuan/ton next week. It is recommended to do more on dips. Selling hedging companies can reduce their hedging positions on dips.
Post time: Aug-18-2021