On September 27, the aluminum price was lowered
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According to the data of the business community, the average price of domestic aluminum ingots in the East China market on September 27 was 18280 yuan/ton, a daily drop of 1.12%, down 0.44% from the average market price of 18360 yuan/ton at the beginning of the month (9.1), and down 20.31% from the average market price of 22940 yuan/ton in the same period last year.
On September 27, the aluminum commodity index was 102.18, down 1.16 points from yesterday, down 24.58% from the cycle’s highest point of 135.49 (2021-10-19), and up 88.45% from the lowest point of 54.22 on November 24, 2015. (Note: Period refers to 2011-09-01 to now)
Fundamentals Overview
Supply and demand:
On the supply side, the production limit caused by the shortage of water and electricity in Yunnan may be further expanded, or it may reach 20-30%. At present, the annual output reduction in Yunnan has reached more than 1.3 million tons. Although Sichuan and Chongqing are promoting the process of production recovery, the overall supply has declined.
On the demand side, the peak demand season has come, but in terms of the recent downstream commencement, the growth is relatively slow. The operating rate of domestic leading downstream aluminum processing enterprises continued to rise slightly by 0.7 percentage points to 67.1% month on month. In September, the operating rate of downstream processing enterprises was mainly stable, and the recovery was less than expected.
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Inventory:
According to statistics, as of the 26th, the social inventory of domestic electrolytic aluminum mainstream areas was about 650000 tons, 14000 tons less than that of last Thursday, 166000 tons less than that of last Thursday, and 26000 tons less than that of the end of August. As of September 26, LME aluminum inventory was 338850 tons, 1500 tons less than the previous day.
Import and export:
According to the latest data from the General Administration of Customs, the export volume of unwrought aluminum and aluminum products in August 2022 is about 540400 tons, a year-on-year decrease of 17.14% and a year-on-year increase of 10.22%. The export volume of unwrought aluminum and aluminum products from January to August 2022 was 4.71 million tons, an increase of 31.5% from January to August last year.
Future market forecast
After the Federal Reserve raised interest rates in September, due to its more than expected hawkish statement, the market tension was exacerbated. The dollar continued to rise, risky assets were under pressure, liquidity tightened and the economic recession dominated the market, and the aluminum market was under pressure.
In the short term, the aluminum price is still supported by periodic production reduction. We will wait and see whether the actual demand in the downstream is warmer. It is expected that the downward space of aluminum price will narrow in the short term.
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