SunSirs: China's Aluminum Prices Fluctuated Strongly in October

Aluminum ingot price

According to data from SunSirs, the average price of domestic aluminum ingots in the East China market on October 21 was 14,906.67 yuan/ton, an increase of 1.43% from the average market price at the beginning of the month (October 1) of 14,696.67 yuan/ton; compared with the average market price at the beginning of the year (January 1st) 14,553.33 yuan/ton, an increase of 2.43%; compared with the average market price during the year (March 24) 11,230 yuan/ton, an increase of 32.66%.

In October, the price of aluminum ingots was on the strong side, and the overall trend remained sideways.

Comparison of the long-short situation of electrolytic aluminum in October

Long argument:

1. The social inventory of electrolytic aluminum in October is still at a historical low

According to statistics, as of October 15th, the domestic social stock of electrolytic aluminum (including SHFE warehouse receipts) totaled 719,000 tons, which was a relatively historical low and was 197,000 tons lower than the same period last year.

2. The export volume of unwrought aluminum and aluminum products increased month-on-month in Septembe

In 2020, China exported 426,000 tons of unwrought aluminum and aluminum products in September, an increase of 7.7% month-on-month and a year-on-year decrease of 2.1%. In August, it was 395,000 tons.

From January to September 2020, China's exports of unwrought aluminum and aluminum products totaled 3.561 million tons, a year-on-year decrease of 813,000 tons, or 18.6%.

Recent policy factors

1. Limited production impact during heating season

Recently, the Ministry of Ecology and Environment issued the "Action Plan for Comprehensive Treatment of Air Pollution in the Yangtze River Delta Region in the Autumn and Winter of 2020-2021 (Draft for Solicitation of Comments)", "The Action Plan for Comprehensive Treatment of Air Pollution in the Autumn and Winter of 2020-2021 in the Beijing-Tianjin-Hebei Region and the Fenwei Plain The Plan (Draft for Comment) requires that the Yangtze River Delta region, the Beijing-Tianjin wing and surrounding areas, and the Fenwei Plain, address unorganized emissions control in 39 key industries such as steel, building materials, and nonferrous metals, and complete the reduction of excess capacity and the elimination of outdated capacity. The established mission objectives have little impact on the aluminum industry chain. The upstream carbon is partially affected. There is currently no significant change in electrolytic aluminum and alumina production capacity.

October aluminum price forecast

The downstream operating rate is relatively stable. In the later stage, attention will be paid to the price of raw alumina and downstream exports. It is expected that the social inventory of aluminum ingots will enter a period of turbulence. The price of aluminum ingots will likely remain stable in October, and the price range is 14,500-15,300 yuan/ton.

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