Current domestic aluminum price trend

Published on:：

2022-08-18

The current trend of aluminum price can be defined as the cost push under the bear market. Whether the price of electrolytic aluminum can rise depends on whether the cost rise can be smoothly transferred to downstream processing enterprises. As the start-up and shutdown costs of electrolytic cells are very high, that is, the supply of electrolytic aluminum is seriously inelastic, and domestic funds are generally tight, enterprises are eager to accelerate weekly conversion. In this case, electrolytic aluminum enterprises negotiated with downstream processing enterprises.

In July 2018, the national electrolytic aluminum operation capacity was 37.51 million tons, a year-on-year decrease of 1.8%; The operating rate in July was 75.9%, compared with 81.5% in the same period last year; The output from January to July was 21.2 million tons, down 2.4% from last year. The survey involved Shandong electrolytic aluminum company, with a total production capacity of 9.076 million tons, all of which were produced.
Shandong's electricity price has a strong competitive advantage nationwide and is close to ports. Therefore, alumina can be produced using cheaper foreign ore, and alumina can be self-sufficient, so it has a competitive advantage in cost. The average cost of electrolytic aluminum in Shandong Province is about 13500 yuan to 13800 yuan / ton, and the profit per ton of aluminum is nearly 1000 yuan / ton.
From the sales of aluminum melt and ordinary aluminum rods, the consumption in the off-season is relatively light, mainly because the processing cost of aluminum rods is relatively low. During the investigation, 6063（ Φ 90mm) aluminum rod processing fee is 425 yuan / ton. Compared with the high of 470 yuan / T in May, there is a certain decline. In addition, some companies also sell aluminum ingots to reflect the overall sales of aluminum bars. However, for aluminum ingots, the company's shipment is relatively stable, and the off-season only affects the price, not the quantity. The sales of Shandong aluminum rods and ingots can basically reflect the current domestic situation. At present, the processing fee of aluminum rods in the mainstream domestic consumption field has dropped significantly from the high level in May. However, it needs to be added that the reason for the decrease of aluminum rod processing cost may be relatively complex. The author's analysis may include the following points: first, more and more aluminum rod manufacturers tend to directly contact end enterprises for sales and bypass traders. Linking directly reduces the liquidity of supply; Secondly, the aluminum price rose in late August, and the base price brought more profits to traders, so they were willing to give up part of the processing fee.
For the consumption of aluminum, it shows a certain difference. For civil aluminum, ordinary light alloys, including aluminum and foil, are generally sold at present. The sales of aluminum bars are relatively good. The main reason is that the State Grid has sufficient orders at present, and the aluminum rod industry is in short supply due to the shortage of aluminum water supply this year. As far as industrial materials are concerned, the current overall sales situation (including future orders) is relatively good. The main reason is that not many companies have deep processing capacity, and the competitiveness of the industry is weak. In addition, the civil and industrial profiles are as good as the export sales of export business, which is consistent with the aluminum export volume published by the National Bureau of statistics.
The current trend of aluminum price can be defined as the cost push under the bear market. Whether the price of electrolytic aluminum can rise depends on whether the cost rise can be smoothly transferred to downstream processing enterprises. As the start-up and shutdown costs of electrolytic cells are very high, that is, the supply of electrolytic aluminum is seriously inelastic, and domestic funds are generally tight, enterprises are eager to accelerate weekly conversion. In this case, electrolytic aluminum enterprises negotiated with downstream processing enterprises. My ability is not very low. However, when the price rises, the willingness of downstream goods will be greatly reduced, but as long as there is no serious loss period, in order to retain downstream customers, they will still buy as needed. In all aspects of the industrial chain, how much inventory is an important factor in bargaining.
Upstream raw material inventory: Shandong bauxite supply is mainly imported, and bauxite inventory is equivalent to that of the same period last year. At present, the inventory of all imported bauxite in China is only 4 months, and the inventory is low. In terms of alumina inventory, in addition to a small amount of inventory of Shandong traders, the inventory of alumina producers and consumer goods companies is relatively limited. It is understood that the same is true in other parts of the country. For example, the average inventory of alumina in electrolytic aluminum enterprises in Xinjiang is 20 days, and the average inventory in Qinghai is 30 days. This inventory is relatively low. According to SMM statistics, the alumina output in July was 5.9 million tons, and the electrolytic aluminum output was 3.12 million tons

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