SunSirs: Aluminum Price Fell 1.35% on December 29

According to the data of the SunSirs, the average price of domestic aluminum ingots in the East China market on December 29 was 18716.67 RMB/ton, a daily drop of 1.35%, 3.02% lower than the aluminum price of 19300 RMB/ton on December 1.

Today, aluminum prices fell, mainly because of the fall of Lunlv, the external market, the small replenishment of stocks in Wuxi, and the weak downstream consumption.

In the long term, the average price of aluminum ingot market is 17450 RMB/ton compared with the recent recovery starting point (July 14, 2022), and the recent recovery is 7.26% higher.

Bad factors:

1. Domestic production resumption information

Inner Mongolia, Guangxi and other places witnessed a small recovery.

2. Weak downstream demand

After the adjustment of public health policies in China, most of the domestic enterprises experienced a decline in the rate of on duty, and the operating rate of downstream enterprises was not high. As the Spring Festival approached, the demand for downstream terminals weakened. Some enterprises considered taking holidays in advance, and the dual pressure depressed downstream demand. The downstream is in the slack season, demand is still weak, orders in some regions are weak, expectations turn to reality, and aluminum prices are weak and volatile.

Favorable factors:

1. The price of raw alumina is firm

The price of raw aluminum oxide is firm, and cost factors support the rising price of aluminum to some extent. In November, China's bauxite output was 5.755 million tons, down 6.1% year on year. In November, China imported 11.789 million tons of bauxite, up 53.1% year on year. The price of mineral aggregate is firm, and the transportation is limited due to the epidemic disturbance in Shanxi and Henan; Construction in the north is affected by environmental protection; In addition, some alumina profits were reversed, and alumina production was moved downward. It is reported that in November, China's metallurgical alumina output was 6.294 million tons, down 5.7% month on month and 3.2% year on year. In November, the alumina operating capacity was 76.6 million tons, and the national operating rate was 79%.

2. The domestic supply of aluminum ingots is weakening, and the social inventory is relatively low

The hydropower generation in Yunnan accounts for 79% of the total power generation. The arrival of dry season will affect the hydropower supply. The production of electrolytic aluminum in Yunnan will be reduced by more than 20%, affecting the production capacity of 1.3 million tons. At the same time, the recovery of electrolytic aluminum in Sichuan is slow. Some aluminum plants in Henan plan to reduce production due to the arrival of heating season and poor profitability, which will affect the annual production capacity of about 110000 tons. Shipping in Xinjiang is affected by material resources. In the short term, the domestic transport efficiency has declined, the arrival of goods from mainstream consumer areas is still low, and the social inventory of electrolytic aluminum is still at a relatively low level in the same period of history. As of December 29, the social stock of electrolytic aluminum was 490000 tons, and the low stock level was an important short-term factor supporting the aluminum price.

Future market forecast

Near the Spring Festival, the downstream operating rate is difficult to improve. At present, the supply of aluminum ingots is relatively stable, the demand side is still weak, and the operating rate of large-scale downstream processing enterprises has further declined. On the one hand, the number of new orders at the end of the year declined, and enterprises mainly purchased on demand, with a weak desire to stock up. On the other hand, with the approaching of the peak of infection, the rate of factory arrival and the efficiency of cargo transportation have declined to some extent, and the overall consumption is weak. It is expected that the short-term aluminum price will be dominated by weak operation.

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