Aluminum price bottomed out and rebounded

According to the data of business agency, on August 3, the average market price of domestic aluminum ingots in East China was 18136.67 yuan / ton, up 0.20% daily, down 0.44% from the average market price of 18316.67 yuan / ton at the beginning of the month (8.1), and down 7.90% from the average market price of 19090 yuan / ton in the same period last year.

At the peak in 2021 (October 19, 2021), the average market price of aluminum ingots was 24240 yuan / ton, and the recent deviation from the peak fell by 24.77%. Starting from the recent recovery (December 13, 2021), the average market price of aluminum ingots was 18693.33 yuan / ton, down 2.44% recently.

Fundamentals overview

After the aluminum price stopped falling and stabilized, it rose slightly. In the early stage, affected by capital factors, under the background of interest rate hikes by central banks, bulk commodities plunged sharply from June to July, and aluminum prices also fell all the way, once falling below 17500 yuan / ton. Recently, they stopped falling and stabilized, returning to above 18000 yuan / ton.

Macro factors dominated the early aluminum price trend. As the price gradually approached the cost side, fundamental factors began to rise. From the inventory data, the recent social inventory began to show a cumulative trend, and the previous inventory removal momentum weakened; In terms of capacity data, from January to July, the newly built capacity was 1.03 million tons / year, the newly invested capacity was 1.67 million tons / year, the resumed production capacity was 2.579 million tons / year, and the reduced production capacity was 965000 tons / year; The domestic supply of aluminum in the first half of the year has a high capacity utilization rate. On the one hand, based on the relatively high price of aluminum ingots in the early stage, the operating profit is good; On the other hand, it is due to the capacity ceiling effect. Electrolytic aluminum production increased in the first half of the year.

Aftermarket forecast

In the short term, the probability of sideways volatility increased, and inventories began to accumulate gradually, suppressing aluminum prices to a certain extent. At present, the growth rate of downstream demand is unlikely to support the operation of high aluminum prices.