Aluminum prices fell first and then rose in September
| Gamma-PGA (gamma polyglutamic acid) |
Aluminum prices first fell and then rose in September, showing strong performance recently. According to the Commodity Market Analysis System of Shengyi Society, as of September 26, 2024, the average price of aluminum ingots in the East China market in China was 19980 yuan/ton, an increase of 1.71% from the market average price of 19643.33 yuan/ton at the beginning of the month (September 1).
On September 26, 2024, the spot price of aluminum ingots (AL99.70) for China Aluminum Corporation Limited is as follows: the external quotation for the East China market is 19990 yuan/ton, the external quotation for the South China market is 19810 yuan/ton, the external quotation for the Southwest market is 19940 yuan/ton, and the external quotation for the Central Plains market is 19940 yuan/ton.
Macro positive news
On September 24, Pan Gongsheng, President of the People’s Bank of China, announced at the press conference of the State Council Reform Office that he would create swap facilities for securities, funds and insurance companies, and support eligible securities, funds and insurance companies to obtain liquidity from the Central Bank through asset pledge, which would significantly improve their ability to obtain funds and increase their stock holdings. Create special refinancing programs to guide banks to provide loans to listed companies and major shareholders, and support stock repurchases and increases in holdings.
The Governor of the People’s Bank of China, Pan Gongsheng, stated that the reserve requirement ratio will be further lowered by the end of the year based on the situation. It is possible to further lower the reserve requirement ratio by 0.25-0.5 percentage points.
The central bank has proposed further interest rate cuts and reserve requirement ratio cuts to release liquidity, while also creating a shift towards refinancing to guide listed companies to repurchase and increase their holdings of stocks. At the real estate level, it is proposed to lower the interest rates of existing housing loans and unify the minimum down payment ratio for housing loans. A series of policy combinations have brought confidence to the market, and commodities have collectively turned red. In the short term, non-ferrous metals are mainly boosted by policies.
Domestic inventory changes
In September, the overall inventory of the electrolytic aluminum plant area decreased, and the social inventory decreased significantly, resulting in a downward shift in overall inventory.
As of September 26th, incomplete statistics show that the main electrolytic aluminum plant inventory in China is 49000 tons, compared to 53000 tons on August 29th. The inventory has decreased by 4000 tons, but compared to 47000 tons on September 12th, the cumulative inventory is 2000 tons.
As of September 26th, the mainstream social inventory of aluminum ingots in China was 684000 tons, compared to the main factory inventory of 803000 tons on August 29th, with 119000 tons sold out.
Future expectations
Recently, on the supply side, Yunnan electrolytic aluminum enterprises are nearing the end of their resumption of production, with high daily output and narrowed upward space; Overseas New Zealand direction, due to power shortages, supply has slightly decreased. On the demand side, there has been a rebound in operating rates in multiple downstream sectors, with electrolytic aluminum and aluminum rod inventories both experiencing slight destocking. It is expected that supply and demand will stabilize in the short term, with the main focus on macro trading sentiment.
In the medium term, focusing on the supply tightening caused by the reduction in production during the dry season, the favorable supply side may be an important factor supporting the future strength of aluminum prices.
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