Aluminum prices rose slightly on September 15

According to the data from the business community, the average price of domestic aluminum ingots in the East China market on September 15 was 18813.33 yuan/ton, up 0.89% daily, 2.47% higher than the average market price of 18360 yuan/ton at the beginning of the month (9.1), and 15.41% lower than the average market price of 22240 yuan/ton in the same period last year.

At the peak price of 2021 (October 19, 2021), the average market price of aluminum ingots was 24240 yuan/ton, and the recent deviation from the peak fell by 22.39%. At the beginning of the recent recovery (July 14, 2022), the average price of aluminum ingot market was 17450 yuan/ton, and the recent recovery increased 7.81%.

Fundamentals Overview

On the domestic supply side: Yunnan has given a notice on load reduction. At present, the affected capacity has reached about 500000 tons, or expanded to 1.5 million tons, and the supply and demand pattern is expected to tighten; The production capacity of Sichuan and Chongqing is under recovery, and it will take time to fully recover. The tight domestic supply pattern is expected to rise.

On the domestic demand side, downstream consumption has improved slightly on a month on month basis, but not as much as the same period last year; As of the 15th, the social inventory in the mainstream areas of China was around 685000 tons, which has risen slightly on a month on month basis recently.

On the news side, the production capacity of aluminum plants with high energy consumption caused by the European energy crisis has been significantly affected. Recently, new production reduction news has brought worries about aluminum supply to the market.

Future market forecast

The bearish expectation triggered by the macro pessimism in the early stage was gradually diluted under the impact of the production reduction news.

In the short term, the aluminum price will be supported by periodic production reduction, and we will wait to see whether the actual demand in the downstream will turn warmer. It is expected that the aluminum price will be subject to strong and wide shocks in the short term.