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Inventory surge, cut power cuts can save aluminum prices?

Release time:

2024-03-02 09:52

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Overseas inventories continue to rise, domestic tired storage continued, in the case of no significant changes in the supply side, this week aluminum prices rushed high after the rapid decline, in the domestic electrolytic aluminum consumption is expected to officially cash in, aluminum prices upward space is limited. Domestic reference operating range: 18300-19100. Overseas reference operating range: $2400-$2600.

1, production cuts on the aluminum supply and demand pattern has a significant impact.

We know that before the power limit, the market for aluminum prices as a whole is bearish, in the push balance sheet, the overall supply in 2023 is oversupply, the market is generally expected to be surplus 30-1.5 million tons, after the power limit this situation has been improved. In January 2023 (31 days), domestic electrolytic aluminum production was 3.418 million tons, down 0.6 percent month-on-month and up 6.7 percent year-on-year. Average daily production decreased by 642 tons to 110300 tons/day month-on-month. In January 2023, the domestic electrolytic aluminum operation capacity fell back, mainly due to the power shortage in Guizhou from December to January. After three rounds of power rationing and production reduction, the operation capacity at the end of January decreased by 760000 tons compared with the end of November and 310000 tons compared with the end of December. In January, Sichuan, Guangxi region a small amount of resumption of production, the total production capacity of about 50000 tons, Gansu Zhongrui, Guizhou Yuanhao and Bai Yinhua new production scale of about 120000 tons.


2, the field of new energy vehicles is still remarkable

In 2022, new energy vehicles continued to grow explosively, with production and sales of 7.058 million and 6.887 million vehicles respectively, up 96.9 per cent and 93.4 per cent respectively over the same period last year, and the market share reached 25.6 per cent. In 2022, the production and sales of 27.021 million vehicles and 26.864 million vehicles, respectively, increased by 3.4 percent and 2.1 percent year-on-year, respectively. Compared with the previous year, the growth rate of production was the same, and the growth rate of sales decreased by 1.7 percentage points.


3, raw aluminum imports fell sharply year-on-year.

According to the data of the General Administration of Customs of China, China's import volume of primary aluminum in December 2022 was about 127645.601 tons, of which the import volume of tariff 76011010 was 47.994 tons and the import volume of tariff 76011090 was 127597.607 tons. In December 2022, raw aluminum imports rose 15.3 percent month-on-month and 55.2 percent year-on-year. In 2022, the total amount of domestic primary aluminum imports was 668000 tons, down 58% year on year. China's export volume of primary aluminum in December 2022 is about 677.3 tons, of which the export volume of tariff number 76011010 is 428.138 tons, and the export volume of tariff number 76011090 is 249.125 tons. In December 2022, raw aluminum exports fell 71.7 percent month-on-month and 8.2 percent year-on-year. In 2022, the total domestic primary aluminum exports totaled 196012.8 tons, up 2680 percent year-on-year.


4, inventory surge, continue to pressure aluminum prices

Aluminium prices fell to a five-week low on Monday as aluminium stocks surged on the London Metal Exchange (LME). Data show that LME aluminum stocks have nearly doubled in the past week to more than 576000 tons, easing market concerns about supply shortages. Affected by this news, aluminum prices fell to $2410/ton, the lowest level since January 10. On February 9, 2023, SMM counted 1.19 million tons of domestic electrolytic aluminum ingot social inventory, an increase of 143000 tons from last Thursday's inventory and 47000 tons from last Monday's inventory. Inventory increased by 241000 tons over the same period in February last year. Compared with the 1.19 before the Spring Festival, the inventory increased by 449000 tons. This week, the stock of electrolytic aluminum ingots is still accumulated. This week, the stock of electrolytic aluminum ingots increased by 47000 tons, and the growth rate slowed down, but the overall volume was still high. The latest statistics of aluminum rod inventory are about 214400 tons, an increase of 5000 tons from last Thursday's inventory, but a decrease of 8500 tons from Monday's inventory. Historical comparison of the tired warehouse situation during the Spring Festival, the second week after the Spring Festival aluminum ingot inventory growth is still high compared to the same period, but aluminum rod inventory growth slowed down, at a low level.


5. What are the trading opportunities for aluminum prices?

Overseas inventories continue to rise, domestic tired storage continued, in the case of no significant changes in the supply side, this week aluminum prices rushed high after the rapid decline, in the domestic electrolytic aluminum consumption is expected to officially cash in, aluminum prices upward space is limited. Subsequent aluminum prices are expected to maintain a volatile trend, the domestic reference operating range: 18300-19100. Overseas reference operating range: $2400-$2600.

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In order to adapt to the rapid development of the photovoltaic market, Shandong Dongxin Aluminum Co., Ltd. was established in 2015, specializing in providing high-quality aluminum and steel products such as frames, brackets and accessories for photovoltaic industry enterprises.

Dongxing Products

After 30 years of continuous research and development, Dongxing Aluminum Group's aluminum profiles and hardware deep processing varieties have reached more than 60000; with the establishment of the assembly workshop, Dongxing has its own mature products, which are widely used in electronics, Electrical appliances, machinery, automobiles, new energy and other fields.