Aluminum prices exceeded 19000 yuan/ton in September
According to the Commodity Market Analysis System of Business Society, on September 5, 2023, the average price of domestic aluminum ingots in the East China market was 19253.33 yuan/ton, a decrease of 0.88% compared to the previous trading day, and a decrease of 1.82% compared to the aluminum price of 19610 yuan/ton at the beginning of the month (September 1).
In the long term, the current price is in a sideways range after a high decline. Since May, the price has been fluctuating below 19000 yuan/ton, breaking through 19000 yuan/ton at the end of August.
Overview of Fundamentals
Enhanced raw material benefits:
The continuous production restrictions in the Sanmenxia area of Henan Province, coupled with the planned restart of an aluminum oxide enterprise in Inner Mongolia, involve a production capacity of approximately 500000 tons. The routine equipment maintenance work of some aluminum oxide enterprises in Shandong and southwestern regions, as well as the increase in overseas bauxite prices, have jointly exacerbated the problem of tight supply of bauxite. The cost of aluminum oxide has increased, and the price of aluminum oxide has been firm.
2. Steam coal is affected by news and has positive support in the short term.
Increased pressure on the supply side
Supply side: With the resumption of production by electrolytic aluminum enterprises in the southwest region, the current production capacity is at a relatively high level. At present, the resumption of production in Yunnan region has come to an end. Although the current production capacity is relatively high, the proportion of aluminum water is still high, and the supply of aluminum ingots is still tight. The production of electrolytic aluminum in July was 3.481 million tons, a year-on-year increase of 1.5%; The cumulative production from January to July was 23.618 million tons, a year-on-year increase of 2.8%. In August, with the release of production capacity in the Yunnan region, there are still expectations of production capacity growth.
Low inventory
In terms of social inventory, following the start of destocking in the second half of July, inventory is relatively low. As of September 4th, the mainstream areas of domestic electrolytic aluminum ingots have a social inventory of 477000 tons, with a cumulative inventory of 20000 tons compared to August 29th. However, compared to July 31st, the inventory was 506000 tons and 29000 tons were removed. Based on year-on-year data, it is still at a low level in the same period of the past five years.
Future market forecast
Macroscopically positive, with strong supply and demand. Currently, electrolytic aluminum production capacity is operating at a high level, but the high aluminum water ratio has led to a low mainstream inventory of aluminum ingots in society. Aluminum has exceeded 19000 yuan/ton, mainly supported by low inventory and strong demand expectations, coupled with rising costs. However, recently, aluminum ingots have started to accumulate on a month to month basis, and it is expected that aluminum prices will fluctuate around the 19000 yuan/ton line in the short term.
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