Aluminum, which has been unknown in non-ferrous metals, has now become a sweet pastry. Driven by tight supply, the futures price has continued to soar since last week, with a cumulative increase of 6.66%. And this Monday, Shanghai Aluminum (22245, -1135.00, -4.85%) continued to rise sharply, rising to a high in more than 15 years.
There are frequent supply-side disturbances in the aluminum market. How much capacity is currently affected? Will the disturbances suffered by aluminum plants in various places due to power curtailment and dual control of energy consumption continue throughout the year? The social inventory of aluminum ingots has increased, what is the downstream demand situation? The gains have clearly surpassed other metals. Why is Shanghai Aluminum so strong? Can this situation continue?
Wang Yunfei, researcher of all non-ferrous metals at Shenyin Wanguo Futures Research: The current good aluminum price rise is mainly due to the expectation of production cuts on the supply side. In the off-season in August, aluminum ingots are difficult to accumulate. Since the end of August, news of production restrictions have been reported in major producing areas such as Xinjiang and Guangxi. The main suppliers of alumina on the superimposed raw materials have begun to reluctantly sell, and the prices of raw materials have risen sharply. The supply of aluminum ingots is concentrated and the prices have risen sharply.
Liu Chao, Senior Researcher of Nonferrous Metals, BOCI Futures Research and Consulting Department: In order to meet the requirements of carbon emissions, domestic energy consumption dual control measures have been continuously strengthened. Inner Mongolia, Guangxi, and Xinjiang have successively implemented electrolytic aluminum production restrictions, and the monthly supply of electrolytic aluminum has declined significantly. At the same time, Yunnan, as a major province of electrolytic aluminum, was affected by the weather and drought. Enterprises have reduced the load of electricity, and the output of electrolytic aluminum has dropped significantly compared with the beginning of the year. Electrolytic aluminum inventories continue to remain low, downstream demand has entered a peak consumption season, and aluminum prices have risen due to the imbalance between supply and demand.
There are frequent disturbances on the supply side of the aluminum market. How much capacity is currently affected? Will the disturbances suffered by aluminum plants in various places due to power curtailment and dual control of energy consumption continue throughout the year?
Wang Yunfei, a researcher of all non-ferrous metals at Shenyin Wanguo Futures Research: According to calculations by relevant institutions, the total production capacity affected in Xinjiang and Guangxi is about 900,000 tons per year. In winter, with the seasonal decline of hydropower generation in Southwest China, Yunnan and Guizhou Provincial output may be suppressed. After the power cut in the second quarter, output in Yunnan has recovered somewhat, but the overall recovery is limited. The off-season of power generation in the fourth quarter is longer, and the peak power consumption in winter makes the overall power supply in Southwest China not optimistic, and the output is likely to decrease or increase. In terms of dual control of energy consumption, in accordance with the policy requirements for high energy consumption and GDP output, the limited production of major thermal power areas such as Inner Mongolia and Xinjiang will exist in the future or for a long time. However, due to the long dry period in the southwestern hydropower area, the power supply is tight. Under circumstances, part of the production capacity may also be shut down for a long time.
Liu Chao, Senior Researcher of Nonferrous Metals, Bank of China International Futures Research and Consulting Department: Yunnan, Guangxi, Xinjiang, and Northwest China will affect about 2.3 million tons of production capacity, which actually affects output of about 1 million tons. At present, it is the rainy season in Yunnan, and the supply of hydropower is gradually recovering, and the output of electrolytic aluminum in Yunnan is expected to rebound slightly. However, it is difficult for the actual supply of aluminum to recover in the short term. On the one hand, with the exception of Yunnan, other regions have clearly set targets for total electrolytic aluminum output within this year, and the output decline is clear; on the other hand, it takes time for aluminum plants in Yunnan to resume full-load operation, and August is the season with the most rainfall in Yunnan. , As time goes by, precipitation will fall back to a low level at the end of the year. Therefore, there are still many uncertainties in the actual recovery of Yunnan electrolytic aluminum production.
Recently, the social inventory of aluminum ingots has increased. How about the downstream demand? Will high aluminum prices curb subsequent demand?
Shenyin Wanguo Futures Research All Ferrous Metal Researcher Wang Yunfei: Downstream consumption fell sharply in June, but rebounded in July. At present, downstream consumption has been significantly lower than that in the first half of the year. With the increase in aluminum prices, market purchasing sentiment has also been affected. In addition, from the perspective of the consumer side, since September, due to chip problems, auto production will be significantly reduced. In addition, the Fed’s taper fell in the fourth quarter. Short-term consumption is not optimistic. If prices continue to rise, the possibility of a further decline in consumption cannot be ruled out.
Liu Chao, Senior Researcher of Nonferrous Metals, BOC International Futures Research and Consulting Department: The current increase in aluminum prices has been recognized by the industry, and the fact that the prices of raw materials have risen can also be accepted overseas. After the price rises, the company’s demand for funds will increase, which will have a certain impact on the purchase volume. Economic growth at home and abroad has maintained steady growth, demand in the new energy sector has grown rapidly, and overall demand for aluminum has grown steadily.
At present, the new high of aluminum prices continues, will the strong state continue?
Wang Yunfei, a researcher of all ferrous metals at Shenyin Wanguo Futures Research: From the current situation, due to more production cuts and the possibility of certain supply disturbances in northern alumina in the fourth quarter, as well as the overall low level of domestic social inventories, aluminum prices are still not visible. Based on the deep callback, there is a high probability that it will continue to maintain a high level of operation. The fall in auto consumption in September and the tightening of foreign monetary policies may put more pressure on aluminum prices. The current sustained and substantial upward trend may be corrected. It is expected that the mid-term high of the market may appear near the end of the year.
Liu Chao, Senior Researcher of Nonferrous Metals, Bank of China International Futures Research and Consulting Department: The political situation in Guinea is turbulent, and the supply of bauxite is uncertain. Domestic energy efficiency dual control will continue to be strengthened, and spot supply will remain tight. Gold, nine, and silver, ten are the peak seasons for traditional consumption, and demand in the downstream new energy sector continues to heat up. It is expected that the strong pattern of aluminum prices will continue.
Post time: Sep-14-2021