Aluminum prices fluctuated sideways in August

 

According to the Commodity Market Analysis System of Business Society, on August 23, 2023, the average price of domestic aluminum ingots in the East China market was 18890 yuan/ton, an increase of 0.96% compared to the previous trading day and 18596.67 yuan/ton, an increase of 1.58% compared to the beginning of the month (August 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 18350-18650 yuan/ton in August.

 

Short term upward momentum

 

On the 23rd, the coal mine was affected by a dangerous accident, leading to a rise in coal prices, which has brought expectations of a certain cost increase to the electricity consuming and aluminum industries. The price of electrolytic aluminum has shown an emotional upward trend today.

 

Fundamentals remain unchanged

 

Enhanced raw material benefits:

 

1. The continuous production restrictions in the Sanmenxia area of Henan Province, as well as the increase in overseas bauxite prices, have jointly exacerbated the problem of tight supply of bauxite. The cost of alumina has increased, and the price of alumina has remained firm.

 

2. Steam coal is affected by news and has positive support in the short term.

 

Increased pressure on the supply side

 

Supply side: With the resumption of production by electrolytic aluminum enterprises in the southwest region, the current production capacity is at a relatively high level. The production of electrolytic aluminum in July was 3.481 million tons, a year-on-year increase of 1.5%; The cumulative production from January to July was 23.618 million tons, a year-on-year increase of 2.8%. In August, with the release of production capacity in the Yunnan region, there are still expectations of production capacity growth.

 

Good inventory performance

 

In terms of social inventory: Starting from the second half of July, the inventory will continue to be depleted. As of August 21, the mainstream areas of domestic electrolytic aluminum ingots have a social inventory of 434000 tons, which is 506000 tons compared to July 31, and 72000 tons have been destocked.

 

Poor export data

 

Import and export: According to statistics from the General Administration of Customs of China, in July 2023, China exported 489700 tons of unwrought aluminum and aluminum products, a year-on-year decrease of 24.9%; From January to July, the cumulative export volume was 3.2964 million tons, a year-on-year decrease of 20.7%. In July, China imported 231400 tons of unwrought aluminum and aluminum products, a year-on-year increase of 20.1%; From January to July, the cumulative import volume was 1.4319 million tons, a year-on-year increase of 12.2%.

 

Demand performance has improved

 

On the demand side: Downstream demand has slightly rebounded. The operating rate of aluminum profiles has significantly increased, at around 60-70%. The operating rate of aluminum strips and plates is around 70-80%, and the operating rate of aluminum cables is close to 60%. Last week, the weekly operating rate of aluminum cables increased by 59% to 60%, the weekly operating rate of aluminum profiles increased significantly by 5.6% to 67.3%, and the weekly operating rate of recycled aluminum alloys decreased by 0.3% to 49.3%.

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