The supply and demand pattern is well supported, and the short-term aluminum price volatility is strong

A large amount of carbon dioxide is produced during the production of electrolytic aluminum. This is not in line with the spirit of “carbon neutrality” and “carbon peaking” proposed by Chinese leaders last year. In the future when environmental protection is increasingly valued, the progress of electrolytic aluminum production capacity will be affected. At the same time, the new energy industry is receiving more and more attention due to its environmental protection. The downstream demand for aluminum has increased. The current low inventory also indicates that the supply and demand pattern of the aluminum market is good. The short-term fluctuation of aluminum prices is expected to be strong, and it is recommended to pay attention to supervision Related policies adopted by the management to ensure supply and stabilize prices.

A large number of greenhouse gases are emitted during the production of electrolytic aluminum, and policies restrict the production of electrolytic aluminum

In my country, most electrolytic aluminum is produced through thermal power generation. Thermal power generation generally generates electricity by burning thermal coal (854, -2.00, -0.23%), and thermal coal will produce a large amount of carbon dioxide during the combustion process, which is harmful to the environment. Cause harm. At present, my country’s electrolytic aluminum production capacity is mainly concentrated in Shandong, Inner Mongolia, and Xinjiang. The low electricity price in the Northwest has attracted a lot of electrolytic aluminum production capacity to transfer to the past. However, under the influence of “carbon neutrality” and “carbon peaking”, multiple energy consumption dual control measures have been issued in many places, such as Inner Mongolia, Ningxia, Guangdong, etc., which will slow down the pace of electrolytic aluminum production capacity. Recently, the “Notice on Strengthening the Management of the “Two Highs” Projects” issued by the General Office of the People’s Government of Shandong Province clearly stated that new “two highs” projects should be built and the reduction of production capacity, coal consumption, energy consumption, carbon emissions, and pollutant emissions should be strictly implemented. Alternative system. Alternative sources for reductions should be monitorable, statistic, and reviewable, otherwise they shall not be used as alternative sources. In terms of capacity reduction substitution, the electrolytic aluminum project is no less than 1:1.5. In terms of energy consumption reduction, the replacement ratio of electrolytic aluminum is not less than 1:1.5. In terms of carbon emission reduction substitution, electrolytic aluminum is not less than 1:1.5. Many places have begun to strengthen “dual control”, and the production of electrolytic aluminum production capacity will be affected.
From the perspective of cost, the cost of alumina and the cost of electricity are the main raw materials for electrolytic aluminum, and both costs can account for about 35% of the production cost of electrolytic aluminum. As far as alumina is concerned, since the supply-side reform does not involve alumina, the expansion of alumina production capacity has not been affected. However, the current price of electrolytic aluminum is high, and the demand for alumina from electrolytic aluminum smelters that can produce is relatively strong. Therefore, the alumina market is currently in a state of slight oversupply, and the funds to participate in alumina are relatively limited, so alumina will continue to operate at a low level in the short term.
As far as thermal coal is concerned, not only thermal coal is required to produce electrolytic aluminum, but now the country has entered the summer, the temperature has risen significantly, and the demand for electricity has increased, which has stimulated the price of thermal coal to rise. As of June 24, the spot price of thermal coal was 990 yuan. /Ton, at a high level during the year. The strong thermal coal price will increase the production cost of electrolytic aluminum, and there is support under the aluminum price.

Inventory continues to decline, downstream demand is acceptable

The consumption of electrolytic aluminum is mainly concentrated in industries such as real estate, automobiles and home appliances. From the data point of view, the performance of the real estate data sheet continued to improve, and the year-on-year increase in automobile production and sales data was still relatively large. Home appliances have maintained a good year-on-year growth rate in terms of production, sales and export. It can be seen that the year-on-year growth rate of the relevant data of the aluminum terminal industry has turned down. This shows that these industries are gradually getting rid of the low base impact caused by the epidemic in the same period last year, but they are gradually returning to the normal year-on-year growth rate. It still takes a certain amount of time. Therefore, in the short term, it is expected that the terminal consumption of aluminum will continue to be good.


The above industries are all traditional needs for aluminum. This year, as people’s awareness of environmental protection has gradually increased, the new energy industry has received more and more attention. Industries such as new energy vehicles, photovoltaics, and wind power are booming. New energy vehicles pursue light weight, so their bodies are generally made of aluminum. The frame of photovoltaic cells is made of aluminum alloy. Aluminum is also used in many parts of windmills that generate electrophoresis. On the whole, the “carbon neutral” policy not only inhibits the process of putting electrolytic aluminum production capacity, but also broadens the downstream consumption points of electrolytic aluminum.

In terms of social inventory, as of June 24, according to statistics, the social inventory of electrolytic aluminum in five places was 874,000 tons, a decrease of 16,000 tons from last week. Inventory in the same period last year was 722,000 tons. The current inventory is at the 3rd lowest level in the same period of 5 years. The low level of futures inventories also reflects the current good situation of aluminum supply and demand.

Aluminum prices remain strong. In addition to its own internal impact, it also has a certain relationship with sufficient overseas liquidity. Affected by the epidemic, the United States has issued a series of economic stimulus policies since the first quarter of this year. Global liquidity is sufficient. It is a product with global pricing. Therefore, with loose liquidity, aluminum prices will naturally be boosted. However, the continuous strengthening of commodity prices in the first half of this year has significantly increased the production costs of domestic small and medium-sized enterprises, and their profits have been eroded. This situation has attracted the attention of the supervisory authorities. Starting from May 12, the supervisory authorities have frequently spoken about the need to maintain supply and stable prices, and bulk commodities have generally recovered.

In summary, “carbon neutrality” and “carbon peaking” not only inhibited the release of electrolytic aluminum production capacity, but also gave birth to new demand for electrolytic aluminum. At present, the inventory of electrolytic aluminum is still low and the fundamentals are acceptable. Aluminum prices are expected The short-term volatility is strong, and we are concerned about whether the 19200 line can be broken again. It is recommended that relevant companies do a good job in risk management, and at the same time, it is recommended to pay attention to the relevant policies adopted by the regulatory authorities to ensure supply and stabilize prices.

Post time: Jun-25-2021