Aluminum prices fluctuated sideways in August
According to the Commodity Market Analysis System of SunSirs, on August 23, 2023, the average price of domestic aluminum ingots in the East China market was 18,890 RMB/ton, an increase of 0.96% compared to the previous trading day and 18,596.67 RMB/ton, an increase of 1.58% compared to the beginning of the month (August 1).
In the long term, as of August 23, aluminum prices were in a sideways range after falling from a high level, and had been fluctuating in the range of 18,350-18,650 RMB/ton in August.
Short-term upward momentum
On the 23rd, the coal mine was affected by a dangerous accident, leading to a rise in coal prices, which had brought expectations of a certain cost increase to the electricity consuming and aluminum industries. The price of electrolytic aluminum showed an emotional upward trend on 23rd.
Fundamentals remained unchanged
Favorable factors in the raw material end enhanced:
- The continuous production restrictions in the Sanmenxia area of Henan Province, as well as the increase in overseas bauxite prices, had jointly exacerbated the problem of tight supply of bauxite. The cost of alumina increased, and the price of alumina had remained firm.
2. Steam coal was affected by news and had positive support in the short term.
Pressure on the supply side increased
Supply side: With the resumption of production by electrolytic aluminum enterprises in the southwest region, the current production capacity was at a relatively high level. The production of electrolytic aluminum in July was 3.481 million tons, a year-on-year increase of 1.5%; the cumulative production from January to July was 23.618 million tons, a year-on-year increase of 2.8%. In August, with the release of production capacity in the Yunnan region, there are still expectations of production capacity growth.
Inventory performance was good
In terms of social inventory: Starting from the second half of July, the inventory was continued to be depleted. As of August 21, the mainstream areas of domestic electrolytic aluminum ingots had a social inventory of 434,000 tons, which was destocked 72,000 tons compared to the inventory 506,000 tons on July 31.
Export data was poor
Import and export: According to statistics from the General Administration of Customs of China, in July 2023, China exported 489,700 tons of unwrought aluminum and aluminum products, a year-on-year decrease of 24.9%; From January to July, the cumulative export volume was 3.2964 million tons, a year-on-year decrease of 20.7%. In July, China imported 231,400 tons of unwrought aluminum and aluminum products, a year-on-year increase of 20.1%; From January to July, the cumulative import volume was 1.4319 million tons, a year-on-year increase of 12.2%.
Demand performance had improved
On the demand side: Downstream demand had slightly rebounded. The operating rate of aluminum profiles had significantly increased, at around 60-70%. The operating rate of aluminum strips and plates was around 70-80%, and the operating rate of aluminum cables was close to 60%. Last week, the weekly operating rate of aluminum cables increased by 59% to 60%, the weekly operating rate of aluminum profiles increased significantly by 5.6% to 67.3%, and the weekly operating rate of recycled aluminum alloys decreased by 0.3% to 49.3%.
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