Aluminum prices rose 4% in August
| Sulfamic acid 99.50% |
According to the data of business agency, on August 27, the average market price of domestic aluminum ingots in East China was 20650 yuan / ton, up 4% from 19856.67 yuan / ton at the beginning of the month.
Taking the average market price of 15726.67 yuan / ton of aluminum ingots at the beginning of the year (January 1, 2021) as the benchmark price, it has increased by 31.31%.
In mid August, the aluminum price broke through the 20000 mark and reached new highs.
Power rationing affects production capacity
The proportion of limited production in Yunnan has increased, and Guangxi, Guizhou and Inner Mongolia have also entered the ranks of limited production. The investment expectation of new production capacity during the year has been reduced to less than 1.3 million tons. At the end of July, Yunnan Shenhuo announced that the production limit was upgraded from 25% to 30%, and 35 units were forced to stop the tank again, with a total of 145 units stopped, and the operating capacity decreased to 550000 tons. In early August, Yunnan Aluminum was not spared. The shutdown situation was similar to that of Shenhuo. The shutdown ratio of aluminum plant reached 30%, and the operating capacity decreased to 1.87 million tons.
Expected factors: it is difficult to resume production in Guangxi and Yunnan in September. In the second half of 2021, the supply and demand of electricity in flood season is expected to be basically balanced, the supply may be insufficient in some periods, and there is still a gap in electricity and electricity from November to December. At the end of the year, Yunnan entered the dry season again, and the restart cost of electrolytic aluminum cell is high. In order to avoid frequent switching, it is expected that it will be difficult for Yunnan electrolytic aluminum plant to resume production on a large scale from September to October.
Rising price of raw alumina & electricity price policy raises the cost expectation of aluminum price
Due to the restrictive power supply in Guangxi, coupled with weather factors, the rainy season lasting for several months affected the mining of open-pit mines in Guangxi, and the ore supply decreased. It is reported that the output of two local alumina plants in Guangxi decreased by 7.2% compared with that before the reduction, with a total reduction of about 1.1 million tons of annual production capacity. The market price of China’s domestic alumina has maintained an upward trend recently, and the market price of alumina has increased slightly. At present, the quotation and transaction focus in the northern market are basically around 2700 yuan / ton. Recently, traders have actively entered the market, and alumina manufacturers are still strongly willing to support prices. Downstream electrolytic aluminum enterprises mainly execute long orders, and their enthusiasm for spot procurement of alumina is not very high.
The price rise of raw alumina is mainly driven by factors such as coal shortage and power restriction, and the cost of electrolytic aluminum continues to rise.
On August 27, the national development and Reform Commission issued a notice on improving the step price policy of electrolytic aluminum industry. It is proposed that the grading and price increase standards of stepped electricity prices will be improved, in which it is clearly prohibited to introduce preferential electricity price policies everywhere. All localities shall strictly implement the national electricity price policy. It is strictly prohibited to implement preferential electricity prices for the electrolytic aluminum industry and organize special transactions in the power market of electrolytic aluminum enterprises. Those that have been implemented and organized shall be cancelled immediately. It is strictly prohibited to include the introduction of preferential electricity price policies into the responsibility evaluation and assessment of energy consumption dual control objectives of Provincial People’s governments.
In addition, the NDRC also proposed to encourage electrolytic aluminum enterprises to improve the utilization level of non-aqueous renewable energy such as wind power and photovoltaic power generation and reduce fossil energy consumption. If the electricity consumption of non-aqueous renewable energy by electrolytic aluminum enterprises accounts for more than 15% of the total electricity consumption and is not less than the incentive value of non hydropower consumption responsibility weight of the province (autonomous region or municipality directly under the central government) in the previous year, the price increase standard of step electricity price will be reduced by 1% for every 1% increase in the proportion.
The aluminum ingot import window was opened, and the downstream aluminum export increased year-on-year
In July 2021, the import of electrolytic aluminum was 179000 tons, an increase of 13.29% month on month. By country, India and Russia imported 105300 tons and 33800 tons respectively, accounting for 59% and 19%. From January to July, domestic imports totaled 921800 tons, with a cumulative year-on-year increase of 165.86%.
The Shanghai Lun ratio fluctuated and strengthened. The aluminum ingot inventory in Shanghai free trade zone was in the range of 110000-120000 tons, and the port inventory data increased.
In July 2021, the export of unwrought and rolled aluminum and aluminum products was 469000 tons, and the cumulative export from January to July was 3085000 tons, with a cumulative year-on-year increase of 12.7%. The demand for foreign aluminum materials is obviously stronger, but the average monthly export volume is expected to remain at the level of 450000 tons, which is mainly restricted by factors such as high sea freight and frequent international trade frictions.
In August, downstream processing enterprises started construction, first restraining and then increasing
In early August, some aluminum processing enterprises in Zhengzhou and Luoyang, Henan Province received a notice from the Power Bureau under their jurisdiction. Large industrial enterprises limited power by 50% according to the situation, and all industrial enterprises below 10kV stopped production, which is expected to last for three weeks or more.
Downstream processing enterprises took the lead in restraining the start-up and then increasing. The start-up rate of leading aluminum processing enterprises fell by 0.6% to 67.8% in the second week of this month. Henan staggered peak power rationing again led to the weakening of the start-up rate. According to the category of aluminum materials, the production of aluminum plate, strip and foil enterprises is reduced due to insufficient power supply. At the same time, due to the epidemic situation in Zhengzhou, the transportation is blocked, and the willingness of foreign vehicles to go to the epidemic area is very low.
The weekly operating rate of leading aluminum processing enterprises increased by 0.5% to 68.3% in the third week of this month. According to the category of aluminum materials, the high price of aluminum and silicon has a great impact on aluminum profile, primary alloy and cable enterprises. The soaring cost of raw materials compresses the profits of processing enterprises. Relatively speaking, large enterprises do better in orders and risk prevention measures. The impact is relatively small compared with medium and small enterprises, and the order scheduling of aluminum cable enterprises is stable. Power rationing in Henan has eased, the operating rate of aluminum plate and strip has rebounded to 80%, and the operating rate of aluminum foil has remained unchanged. With the rise of aluminum price, some aluminum foil factories said they would increase the processing fee again.
The State Reserve sold 70000 tons in the third batch
According to the Announcement No. 2 of the State Food and Material Reserve Bureau in 2021, it is decided to launch the third batch of national reserve aluminum, zinc and copper in 2021 in the near future. The bidding period is 9:00-12:00 and 13:00-18:00 on September 1. If it is necessary to change the time or stop bidding under special circumstances, it will be notified separately.
The total sales volume of the third batch is 70000 tons of aluminum, 50000 tons of zinc and 30000 tons of copper.
Future forecast
In the golden nine silver ten, domestic demand has gradually come out of the off-season, which constitutes a certain demand factor for aluminum price. The cost and power restriction lead to the reduction of production capacity, which is beneficial to the price of aluminum ingots on the supply side and cost side. At present, the aluminum price support is formed, but the basic price is relatively high, the social inventory destocking is weakened, and the market game tends to intensify.
Ye Jianjun, an analyst of business society, expects that the aluminum ingot price will still operate around 20000 yuan / ton in the near future. On the whole, the short-term downward risk will be weakened and the high shock operation will still be maintained.
| Sulfamic acid |