Aluminum price bottoms out and rebounds

According to the data of business agency, on August 15, the average market price of domestic aluminum ingots in East China was 18243.33 yuan / ton, down 2.37% on a daily basis, down 0.40% from the average market price of 18316.67 yuan / ton at the beginning of the month (8.1), down 8.97% from the average market price of 19090 yuan / ton in the same period last year.

Based on the peak value in 2021 (October 19, 2021), the average price of aluminum ingot Market is 24240 yuan / ton, and the recent deviation from the peak value falls by 24.74%. Based on the starting point of recent recovery (July 14, 2022), the average price of aluminum ingot Market is 17450 yuan / ton, and the recent recovery increases by 4.55%.

Fundamentals overview

In the early stage, affected by capital factors and against the background of interest rate hikes by central banks, commodities plunged sharply from June to July, and aluminum prices also fell all the way down, once falling below 17500 yuan / ton. Recently, the decline has stabilized and returned to above 18000 yuan / ton. Last week, due to the unexpected events in Sichuan, the aluminum production was affected by the high temperature weather, and the local production was expected to be reduced by 10000 tons. The aluminum price news was good. This week’s positive news on the supply side continued, but based on the output data of the first seven months, the year-on-year increase was 1.1%, and the output data of July increased by 4.5%; According to the warehouse out data of the mainstream regions last week, 147000, a month on month decrease; Downstream demand slightly increased year-on-year and weakened month on month.

Macro factors dominated the price trend of aluminum price in the early stage. As the price gradually approached the cost side, the fundamental factors began to rise. From the inventory data, the social inventory began to accumulate in the recent period, 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; In the first half of the year, aluminum was supplied domestically and the capacity utilization rate was high. On the one hand, based on the relatively high price of aluminum ingots in the early period, the operating profit was good; On the other hand, it is due to the capacity ceiling effect. The output of electrolytic aluminum increased in the first half of the year.

Future market forecast

In the short term, the probability of sideways fluctuation increases, and the inventory starts to accumulate gradually, which suppresses the aluminum price to a certain extent. The recent supply side news is favorable to the aluminum price, and it is expected that the consolidation volatility will increase.