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Is it time for the aluminum price to "brake"?

Views: 0     Author: Site Editor     Publish Time: 2021-05-24      Origin: Site

On May 19, Premier Li Keqiang presided over an executive meeting of the State Council, which made arrangements to ensure supply and stabilize prices of bulk commodities, and proposed that we should pay great attention to the adverse impact of rising commodity prices, curb unreasonable price increases, and strive to prevent transmission to consumer prices.The regular session of the foot "brake", so that aluminum prices immediately fell, three consecutive days of substantial reduction.

With the global economy gradually improving in the post-epidemic era, the domestic aluminum price has been soaring, breaking the 20,000 yuan mark last week, a new 13-year high.Some people say that the electrolytic aluminum enterprise that has endured for a few years has finally come out.However, when aluminum prices soar to 20,000 yuan/ton, we must start to think that after all the hype, everything will eventually return to its original nature and return to rationality.

It is time for the aluminum price to "brake"!

Aluminum Coated Coil price- Decoulife

Looking back at the trend of aluminum price since last year, no matter economic recovery, loose monetary policy, or the boost of capacity "ceiling" and "double carbon" hot spot, in less than a year, electrolytic aluminum enterprises gradually turned from loss to win, to the maximum profit of 7,000 yuan/ton, even more than the construction cost of tons of aluminum.We ask ourselves, which raw material industry is so profitable?

History tells us that the market profits are not sustainable, and after the profits are bound to bite its body.

First of all, non-ferrous metals are typically cyclical industries. It is true that periodic price increases will stimulate more supply and improve shortages, but in the overall environment, compared with the bull market after 2008, China has moved from a high growth stage to a high quality development stage, and the high growth at that time is difficult to repeat.What's more, non-ferrous metals serve as the pillar industry of national economic development.Small profits and quick sales are the source of industrial development.

Next, the material rises substantially to be bound to consume end and cost end conduction.Just a few days ago, both Coke's price hike and Tesla's announcement of a second hike pointed to a big increase in the cost of raw materials.Raw materials are the most basic means of production for all industries. The price rise of raw materials means that the cost will rise from the source of the supply chain, which will surely bring about the cost rise of all industries in the industrial chain. After the chain reaction, it will eventually be passed to the end market, and finally affect consumption and cost.

Thirdly, the steel industry has sounded the alarm for the aluminum industry, adjustment and cancellation of tariffs and other policies will accelerate the price decline.Countries often signals we should not be ignored, but prices continue to rise, the national related regulation policy, capital in the abnormal activities of non-ferrous metal levels will not last, it will bring the dramatic ups and downs of the price also is bound to overdraw the future market, comprehensive influence on the industrial chain, can let more industries and enterprises of the production and business operation has certain risk,To the national economic development, the healthy development of industry to bring adverse effects.

Finally, many media and institutions currently place too much emphasis on carbon peaking and carbon neutrality, and exaggerate the concept of carbon emission constraints and the growth of metal demand in the new energy sector, while ignoring the fact that there is no significant growth in consumption fundamentals and the demand for aluminum applications in traditional sectors is slowing down.All this has raised the market's perception and expectations of aluminum prices.

Therefore, from the perspective of the development of the country, industry and enterprises, we must not continue to play a high-profile role in the aluminum price. We must curb the unreasonable rise of the price and make the aluminum price return to rationality as soon as possible.

The author calls for industry enterprises and relevant institutions to take the initiative as a common aluminum price to step on the "brake plate", aluminum prices back to the right path.At the same time, the enterprise must strengthen the risk awareness, do a good job of coping plan.

It is hoped that the aluminum price will return to rationality as soon as possible. Only when the price is in a stable and reasonable range, can the industry maintain the hard-won "warm market" for a long time, and the upstream and downstream of the aluminum industry as a whole become stable and profitable, so as to realize the benign, healthy and sustainable development of the industry.

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