The weakest consumption and the collapse of cost s

2022-07-24
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Weak consumption and collapse of cost support impacted aluminum prices. In November, although some "2+26" cities began to implement measures to limit production in the heating season ahead of schedule, the price of electrolytic aluminum fell all the way. The author believes that the reasons for the unexpected decline of aluminum price are as follows: first, the new production capacity of electrolytic aluminum in areas with limited production in non heating seasons (Guangxi, Inner Mongolia and other places) is put into operation; second, the decline of national electrolytic aluminum production caused by capacity replacement is less than expected; third, the decline of downstream demand is more than expected; fourth, the cost support is shaken when the rise of raw materials is slowing down. With the large-scale production restriction launched on November 15, the double contraction of supply and demand in the aluminum market will continue, and the aluminum price is likely to fall with the cost

the actual decline in output is relatively small.

from the published production restriction scheme in the heating season, Henan Province, Binzhou, Zibo, Liaocheng and Luliang regions of Shanxi Province have successively introduced production restriction schemes, with a total reduction of 3.477 million tons, less than the expected 4million tons. The four months of the heating season affected the output of about 975000 tons of electrolytic aluminum

at the time of limited production in the heating season, new electrolytic aluminum devices are put into operation and capacity replacement is also advancing. According to the statistics of Asian metals, the new production capacity of electrolytic aluminum in the fourth quarter of 2017 reached 2.28 million tons, mainly concentrated in Guangxi, Guizhou and Inner Mongolia. At the end of October, the replacement of electrolytic aluminum production capacity reached a small climax. The replacement capacity of aluminum enterprises in Shaanxi, Guizhou and Xinjiang totaled 2155300 tons. In addition, in the process of capacity replacement, the capacity replacement index is expanded by increasing the current intensity

therefore, the actual decline of electrolytic aluminum production is small. According to the survey data of Asian metals, in october2017, China's electrolytic aluminum output fell by only 1.9% month on month, slightly to 2.95 million tons, an increase of 5.6% year on year

the downstream consumption decreased significantly

the downstream consumption of electrolytic aluminum is mainly concentrated in the construction field, and the decline of real estate construction makes the aluminum consumption show obvious signs of decline. Although the aluminum consumption such as light-duty vehicles must be transformed into a technological innovation and capital driven development model, it has a good prospect, but the current share is relatively low. According to Asian metals data, China's aluminum production fell by 2.2% month on month in September, and the year-on-year growth rate dropped sharply to 8.1%, and the year-on-year growth rate in August was 13%

as of November 9, the social inventory of aluminum ingots in Shanghai, Wuxi and other major cities was 1.691 million tons, which was only 10000-20000 tons lower than the highest record in the year, and a sharp increase of 541% over the same period last year

in addition, the aluminum rod processing fee in major regions dropped significantly in October, which verified that the consumption was weak. The high aluminum price once led to the order loss of cable enterprises in the third and fourth line bidding in China, and the subsequent enthusiasm of enterprises to receive orders decreased

the shaken cost support is the main reason for the decline of aluminum price

the author believes that from the beginning of 2017 to now, the driving force for the rise of aluminum price is not the expectation of supply gap, but the main errors in the practical verification process of the electrified seed testing machine under environmental protection are the partial load of the main engine, the load sensor, the standard dynamometer, the verification direction The cost transmission caused by the sharp rise of raw materials (such as aluminum oxide, prepared anode and aluminum fluoride) caused by the impact of verification personnel and environment. The rise of alumina slowed down in November, and the supply of bauxite did affect the production of some enterprises. However, stimulated by the current profits 2 and the good ventilation performance of high and low temperature experimental machines, most large alumina enterprises are more willing to maintain high or even over production. The author estimates that China's alumina output in October was 6.05 million tons, the net import was about 270000 tons, and the total supply reached 6.33 million tons. While the output of electrolytic aluminum is 3.05 million tons, the converted alumina demand of qiaoxueda, vice mayor of Jiaozuo City is 5.87 million tons, and the actual alumina surplus is 190000 tons

on the whole, the main reason for the unexpected decline of electrolytic aluminum is that the market ignored the slowdown in demand under the cooling of real estate, and overestimated the de capacity of electrolytic aluminum and the supply contraction under environmental protection supervision. In the case of the slowdown in the rise of alumina, the cost conductive rise will naturally reverse to an unexpected decline

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