“Aluminum price” creates new heights
In mid and late April, the spot price of domestic standard aluminum ingots kept rising, breaking through 18000 yuan / ton, reaching new highs.
According to the data of business news agency, the average price of domestic aluminum ingots in East China market in April 30 was 18850 yuan / ton, reaching a new high in nearly a decade. In April alone, aluminum prices rose 9.11% in a single month.
Two rounds of policy superposition industry capacity ceiling basically formed
In 2017, affected by the supply side reform policy, the backward production capacity of electrolytic aluminum was gradually withdrawn from the historical stage by replacement or elimination, and the ceiling Market of electrolytic aluminum compliance capacity was initially estimated at about 44 million tons.
According to the news in early April 2021, the relevant departments of the state have studied the “implementation plan for carbon peaking in non ferrous metal industry” (hereinafter referred to as the “plan”) and are seeking the opinions of industry associations and enterprises《 The plan initially proposes that the non-ferrous metal industry should strive to achieve the peak carbon by 2025 and reduce carbon by 40% by 2040, which will be at least five years ahead of the national peak carbon. ”
The aluminum industry has reached the peak carbon target, which has a significant impact on the new capacity and the existing capacity layout. The market expects that the “ceiling” of electrolytic aluminum compliance capacity of 45 million tons will gradually form.
Judging from the spot price history of aluminum ingots, the price of aluminum ingot is affected by the supply side reform factors. After reaching the high point in the second half of 2017, it gradually entered the downlink period, from the wave band of 16000 yuan / ton above September 2017, and the lowest position appeared in the collapse period caused by COVID-19 in 2020. The aluminum price once fell to 11200 yuan / ton, and then rebounded to 14000-15000 yuan / ton. In the last ten days of November 2020, the aluminum price will continue to strengthen again, breaking through the high level in 2017, opening a new situation of repeatedly reaching new highs. Although there was a short-term correction, with the influence of the policy news of carbon peak and carbon neutral, and the macro favorable factors such as the inflation expectation in the capital market, the commodity price was more emotional, and the aluminum price was rising.
The long-term trend of aluminum price is as follows:
Rising demand expectations
In the first quarter of 2021, China’s aluminum production increased by 13.89 million tons, a year-on-year increase of 31.1%. In March, China’s total aluminum output was 5.367 million tons, up 17.6% year on year.
Looking forward to the second quarter, the market expects that domestic aluminum ingot consumption demand will continue to improve seasonally. First, the overseas market, European and American manufacturing industry continued to recover, and the demand for industrial products recovered. Since April, Europe and Alcoa have reached the highest levels since June 2019 and may 2018 respectively; Second, according to the social inventory data of the domestic market in April, the current destocking is obvious, and the total inventory is at a low level in the same period of recent years. Under the influence of supply constraints, the supply in the spot market is tightening, and the expectation is strengthened.
Recent rising logic
The rise of the market in April is mainly based on three factors:
First, the supply side capacity “ceiling” is expected to be strengthened. Due to the impact of carbon peaking and carbon neutralization, the new capacity of aluminum industry has been restricted in recent years. The market expects that the policy requirements or strict control of electrolytic aluminum capacity of 45 million tons “ceiling” will be implemented. Recently, Guizhou, Shandong and other places have banned illegal new capacity projects in electrolytic aluminum industry, and the new capacity is limited.
Second, the demand side of aluminum consumer side support is strong, aluminum social inventory is relatively low year on year.
Third, the positive macro aspects such as inflation expectations in the capital market have boosted the dominance of the financial attributes of commodities.
Future forecast
To sum up, under the high price and high profit, the current domestic electrolytic aluminum plants are basically in full production status, and the operating rate growth space is limited. Under the domestic carbon neutral target, with the implementation of China’s aluminum industry to accelerate the carbon peak target and the promotion of the local government’s “double control” policy of energy consumption, as a high-energy consumption industry, the electrolytic aluminum production capacity and output will be limited. Recently, the domestic aluminum ingot inventory turned into a downward trend, and the traditional consumption peak season gradually appeared, which strongly supported the aluminum price.
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