SunSirs: On July 26th, Aluminum Prices Fluctuated Horizontally

On July 26th, aluminum prices fluctuated horizontally

According to the Commodity Market Analysis System of SunSirs, the average price of domestic aluminum ingots in the East China market was 18,346.67 RMB/ton on July 26, 2023, with a daily increase of 0.05%.

In the long term, the current price was in the sideways range after a decline from high price levels and was fluctuating in the range of 18,200 to 18,600 RMB/ton.

Analysis review

Supply side: During the rainy season in southwestern China, with the lifting of power load restrictions in Yunnan, it is expected that 1 to 1.3 million tons of production capacity will resume production. As Yunnan continued to promote the resumption process, the impact of power restrictions in Sichuan was temporarily limited, and there are expectations of an increase in domestic electrolytic aluminum supply.

On the demand side: The overall consumption trend continued in the off-season, and the weekly operating rate of downstream processing enterprises was expected to decrease month on month. It is likely that there would be no significant improvement near the off-season in the future. The overall weakness of terminal real estate was still weak, but there was support for the completion end of the short-term insured delivery policy, with weak data on new construction projects, and stronger demand for aluminum downstream in the near term than in the long term; Pay attention to the growth of new energy vehicles, photovoltaic, and ultra-high voltage industries in the later stage.

Market outlook

Aluminum ingot inventory is still at a historical low level, and Yunnan production is expected to release. From a cost perspective, in terms of alumina, due to the resumption of electrolytic aluminum production capacity in Yunnan and the news that local alumina production capacity will be reduced due to mine reclamation in Henan, the short-term alumina prices will fluctuate to be stronger, and the cost support is slightly strengthened. Short term supply pressure may become prominent at the end of July, and it is expected that the social inventory of aluminum ingots will accumulate in July. Short term aluminum prices will move sideways around the price of 18,300 RMB/ton.

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