Views:1 Author:Site Editor Publish Time: 2021-11-15 Origin:Site
Affected by the lower prices of the black series, Shanghai Aluminum performed weakly at a high level this week. It closed at 18,680 yuan/ton on the 5th, a decrease of 5.99%.
Aluminum is affected in different ways
1. On the supply side, on November 4, according to the news from the Internet, Russia will cancel aluminum export tariffs, triggering expectations of an increase in global supply. The current overseas energy shortage has eased but the pressure still exists. It is expected that there is not much room for capacity increase, and overseas demand for aluminum is relatively high, which will directly digest most of the increase, and it is difficult to have a significant impact on the domestic supply side. Domestically, despite the partial relaxation of power restrictions in Jiangsu, Zhejiang, Shanghai and Guangdong after the Eleventh Festival, the dry season in Yunnan has led to increased pressure on hydropower supply, and coal production in the north due to winter heating demand will increase significantly, and the policy side will increase coal prices. Stabilizing prices will become the main logic in the near term. The fall in aluminum prices and the unabated cost pressure have resulted in average profits falling below 1,000 yuan/ton. Most aluminum companies have entered the negative profit range. The supply of electrolytic aluminum is expected to continue to tighten.
2. In terms of demand, in the spot market, aluminum prices continued to pull back this week, demand showed a steady recovery trend, and transactions did not see a significant upward trend. Some downstream companies have expectations that aluminum prices will continue to fall, and they are still mainly waiting and watching. In terms of operating rate, the aluminum alloy sector has experienced a certain reduction in production this week due to the decline in silicon prices and the processing fee has fallen behind. The operating rates of other sectors have steadily rebounded. According to SMM, the downstream processing industry increased by an average of 1.7 percentage points this week due to the continued relief of power curtailment and electricity production. The average operating rate was 65.8%. In terms of processing fees, processing fees for aluminum rods have risen strongly since September and hit a three-year high. With long-term downturn in demand, processing companies have reduced the aluminum-water ratio of cast rods and turned them into aluminum ingots, and aluminum rod inventories have been destocked for 3 consecutive weeks.
3. In terms of inventory, as of November 5, the electrolytic aluminum warehouse rose to 1.013 million tons, and the weekly storage was 31,000 tons. The rate continued to slow down, and the inflection point is expected to come.
4. The current market is still under the influence of a deep drop in coal, and the weak supply and demand pattern of aluminum fundamentals has not turned, and aluminum prices lack sufficient support. In the process of price correction, investors need to pay attention to the progress of the latest news such as coal prices and electricity curtailment on the one hand, and on the other hand, focus on the recovery of downstream consumption and the degree of inventory release, especially the electrolytic aluminum community library has continued to accumulate for 7 weeks. If there is a turning point in Quku in the next two weeks, or a certain momentum is given to aluminum prices to guide prices to turn, on the contrary, aluminum prices will remain volatile and weak.