A Survey of the Price Trend of Aluminum Ingot in 2019

Aluminum prices bottomed out in 2018, hovering at year-round lows, with a range of 13,450-15,000 yuan/ton. In the first nine months, the price of aluminium was running in a “W” trend, and in the fourth quarter, the price of aluminium dropped significantly.

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In the first half of 2019, the price of aluminium was generally inverted “V” operation. The low oscillation in January lasted until before and after the Spring Festival. After the first ten days of February, the price of aluminium ingots began to rise. After a slight decline in late March, the price of aluminium ingots continued to rise in mid-April, breaking through the 14000, 14100, 14200 and 14300 levels continuously. At the end of May, the price of aluminium ingots reached its peak in the year and fell in June. On July 3, the price of aluminium stopped falling and rose, opening up the mode of shock and attack.

According to data from business associations, the average market price of aluminium (99.70) as of July 26 was 13930 yuan/ton, up 3.39% from the market average of 13473.33 yuan/ton at the beginning of January 1, up 5.34% from the valley value of 13223.33 yuan/ton on January 15, down 3.15% from the peak value of 14383.33 yuan/ton on May 15, and from the beginning of 2019 to the beginning of 2019. The current interval amplitude is 8.61%.

Lack of cost factor of raw material alumina supply exceeding demand

1. Alumina production gap is not in place.

It is reported that in 2018, after the impact of the two major events of “Russo Aluminum Sanctions” and “Hyderu Reduction of Production”, there is a big gap in overseas alumina. At present, in terms of supply and demand, alumina has shifted from a large shortage in 2018 to a small surplus in 2019. Although the growth of alumina production capacity in 2019 slowed down year on year, there is still a lot of growth in the whole year.

According to the data of the International Aluminum Association, global alumina production in January-May 2019 totaled about 50.6 million tons, an increase of about 1.2% over the same period last year. For example, the United Arab Emirates Global Aluminum Industry (EGA) put into operation its first alumina refinery in March this year, with a design capacity of 2 million tons per year, and is expected to achieve full-load production in October or November, with an annual planned output of about 1.4 million tons; Heidelu’s production at Alunorte Alumina Plant in Brazil may reach 75.5 million tons in the next two months. – In addition, in 2019, the Alpat Alumina Smelter in Jamaica, the Lanjigarh Smelter in Vedanta, India and the Friguia Smelter in Guinea were restarted or added.

Domestically, Jingxi Tiangui Aluminum Co., Ltd. trial-produced alumina in early July. The company plans to produce about 300,000 tons of alumina in 2019. It is reported that the actual production of Xiangjiang Wanji Alumina reached more than 140,000 tons in June, that of Zhongzhou Aluminum Co., Ltd. reached more than 190,000 tons, and that of Shanxi Alumina by power investment reached more than 270,000 tons. After the basic completion of the technological transformation, the output of Weiqiao Group, Xinfa of Guangxi, Xinfa of Yangquan, Alumina of Shuijiang and Bochuang of Luyu have increased and partially restored, which has made up for the loss of output caused by the discontinuation of the production of the exchange letters starting in May. The domestic alumina supply is excessive. At present, the alumina price has approached a two-year low, and the high-cost alumina refineries in the northern region bear more pressure. Recently, it has been reported that the closure of an alumina refinery with an annual capacity of 1.5 million tons in China has affected the main alumina producing areas in Shanxi and Henan, of which 1 million tons have only been maintained for 30 days since July 20.

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2. A Survey of Import Data of Alumina

According to customs data, China’s alumina imports in 2018 were about 512,100 tons, down 66.66% from the previous year; in January-June 2019, China’s alumina imports totaled about 320,000 tons, down 9.5% from the same period last year. Among them, alumina imports in June amounted to 50,000 tons, an increase of 4.6% over the same period last year. From January to May, China’s alumina exports totaled 177061 tons, an increase of 46.5% over the same period last year.

Smooth Operation of Downstream Aluminum Export Electrolytic Aluminum Capacity Ceiling

1. A Survey of Export Data of Aluminum Materials

According to customs statistics, China’s aluminium exports in the first half of 2019 were 3.7443 million tons, an increase of 3.03% over the same period last year. Among them, aluminium sheets, strips and sheets account for the largest proportion of aluminium exports, accounting for 36%; followed by aluminium products, accounting for 30%; aluminium foil and aluminium profile exports account for 18% and 14% respectively; aluminium tube accounts for the smallest and most stable proportion, accounting for about 2% (as shown below).

2. Monthly Export Data of Five Aluminum Materials

3. Limited increment of domestic production of electrolytic aluminium

From January to June 2019, China’s total production of electrolytic aluminium was about 17.87 million tons, an increase of about 0.8% over the same period last year. Among them, China’s production of electrolytic aluminium in June 2019 was about 3 million tons, a slight decrease of about 0.3% annually, and a decrease of about 2.0% year on year. The output of electrolytic aluminium in Shandong, Xinjiang and Inner Mongolia are 707,000 tons, 529,000 tons and 421,000 tons, respectively, with the average ring-to-ring ratio unchanged; the output in Yunnan is about 161,000 tons, the ring-to-ring ratio is increased by about 6.6%; the output in Henan is about 144,000 tons, the ring-to-ring ratio is reduced by about 10.0%.

4. Overview of International Production Data

5. Data List of Import and Export of Unforged Rolled Aluminum

According to the customs data of the General Administration of Customs, the total export volume of all kinds of aluminium products in January-June was 3.815.68 million tons, and that of Unforged aluminium products in January-June was 46.98 million tons.

6. Global Aluminum Demand Growth Expectations

Norsk Hydro in Norway recently forecast a growth of 1-2% in demand for aluminium in 2019; a decline from the 1-3% expected in April this year; Aluminum in the United States expects a global aluminium shortage of 1.7 million to 2.1 million this year, and then shrinks to 1.5 million to 1.9 million.

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Where is the price of aluminium ingot going?