Aluminum prices fluctuated sideways in July
According to the Commodity Market Analysis System of Business Society, the average price of domestic aluminum ingots in the East China market on July 28, 2023 was 18343.33 yuan/ton, a decrease of 1.11% compared to the aluminum price of 18550 yuan/ton at the beginning of the month (July 1).
In the long term, the current price is in a sideways range after a high decline, and has been fluctuating in the range of 18200 to 18500 yuan/ton in July.
Overview of Fundamentals
On the supply side, electrolytic aluminum enterprises in Yunnan Province have resumed production capacity of 1.3 million tons. Currently, 1.03 million tons have been completed in July. Due to power outsourcing and device maintenance factors, the production capacity in Sichuan Province has been reduced by about 80000 tons. At present, the production capacity is 41.9 million tons, at a relatively high level.
In terms of social inventory: As of July 27th, the social inventory of domestic electrolytic aluminum ingots was 504000 tons. The inventory accumulated slightly in the first half of July and began to be withdrawn in the second half. In July, the trend of aluminum ingot factory inventory was synchronized, and the overall inventory accumulated slightly in July, at around 40000 tons.
Import and export: According to statistics from the General Administration of Customs of China, the import volume of unwrought and rolled non-alloy aluminum in China in June 2023 was nearly 8.94 tons, an increase of 15400 tons compared to the previous month and 60900 tons compared to the previous year. From January to June, the total import volume of unalloyed aluminum in China was 485400 tons, an increase of 288200 tons year-on-year, or 146.11%.
Aluminum prices may continue to fluctuate horizontally in August
Multiple factors: Aluminum ingot inventory is still at a relatively low historical level. From a cost perspective, in terms of alumina, due to the resumption of electrolytic aluminum production capacity in Yunnan and the news that local alumina production capacity will be reduced due to mine reclamation in Henan, the short-term volatility of alumina prices is relatively strong, and cost support is slightly strengthened.
Short selling factor: Yunnan’s production is expected to release, with high production capacity and an increase in electrolytic aluminum production expected.
Uncontrollable factors: Is there a new electricity restriction policy introduced during the summer electricity peak.
The long short game intensifies, and aluminum prices may still fluctuate sideways in August.
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