SunSirs: Electrolytic Aluminum Production Moved up in July and Prices Fluctuated Horizontally

Price trend

According to the Commodity Market Analysis System of SunSirs, the average price of domestic aluminum ingots in the East China market on July 28, 2023 was 18,343.33 RMB/ton, a decrease of 1.11% compared to the aluminum price of 18,550 RMB/ton at the beginning of the month (July 1).

In the long run, as of July 28th, the price of aluminum ingots was in a sideways range after falling from a high level, and was fluctuating in the range of 18,200 to 18,500 RMB/ton in July.

Overview of Fundamentals

On the supply side, electrolytic aluminum enterprises in Yunnan Province resumed production capacity of 1.3 million tons. As of July 28th, 1.03 million tons were completed in July. Due to power outsourcing and device maintenance factors, the production capacity in Sichuan Province was reduced by about 80,000 tons. As of July 28th, the production capacity was 41.9 million tons, at a relatively high level.

In terms of social inventory: As of July 27th, the social inventory of domestic electrolytic aluminum ingots was 504,000 tons. The inventory accumulated slightly in the first half of July and began to be withdrawn in the second half. In July, the trend of aluminum ingot factory inventory was synchronized, and the overall inventory accumulated slightly in July, at around 40,000 tons.

Import and export: According to statistics from the General Administration of Customs of China, the import volume of unwrought and rolled non-alloy aluminum in China in June 2023 was nearly 8.94 tons, an increase of 15,400 tons compared to the previous month and 60,900 tons compared to the previous year. From January to June, the total import volume of unalloyed aluminum in China was 485,400 tons, an increase of 288,200 tons year-on-year, or 146.11%.

Aluminum prices may continue to fluctuate horizontally in August

Favorable factors: Aluminum ingot inventory was still at a relatively low historical level. 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 is fluctuating stronger, and cost support is slightly strengthened.

Bearish factors: Yunnan's production is expected to release, with high production capacity and an increase in electrolytic aluminum production expected.

Uncontrollable factors: Is there a new electricity restriction policy introduced during the summer electricity peak?

The long short game intensifies, and aluminum prices may still fluctuate sideways in August.

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