Low inventory leads to high water levels
At present, Shanghai Aluminum's current structure continues to show a near-high and low negative alignment. The negative price difference between the recent month contract 1611 and the main 1612 contract is as high as 270 yuan/ton, and the spot premium is as high as 465 yuan/ton, highlighting the tight spot supply. As of October 21, the aluminum inventory of the previous period was 84,981 tons, which was close to the five-year low of 83,775 tons set at the end of September of the year, and a decrease of 213,000 tons or 71.8% from the end of last year. As for social stocks, as of October 20, according to statistics, the industrial aluminum inventories of the five regions in China were 234,000 tons, and the weekly reduction was 18,000 tons. This year, the total inventory was 694,000 tons, which was significantly higher than the same period in 2013-2015. The inventory quantity, the higher spot premium status still supports the aluminum price.
From the perspective of the production cost of electrolytic aluminum, the cost of electricity accounts for nearly 40% of the production cost of electrolytic aluminum. Therefore, the energy properties of electrolytic aluminum are far stronger than other non-ferrous metals. Since the beginning of this year, the prices of coal and crude oil have continued to rise, which has led to the expectation of rising electricity costs. The main contract of US crude oil has continued to rise in the past three months, with a cumulative increase of 23.2%, mainly boosted by the OPEC production reduction agreement. The specific implementation plan will be in November. See the OPEC policy meeting. At the same time, on September 21 this year, the state promulgated the “Regulations on the Management of Overrun Transportation Vehicles”, which significantly increased the transportation costs of coal enterprises and aluminum enterprises, and directly led to further tight supply of coal. Thermal coal and coking coal have accumulated over the year to date. They rose by about 100%, and the gains in September and October increased significantly.
Aluminum enterprises increase production and resume production pressure is relatively controllable
At present, the biggest rising resistance for aluminum prices comes from the pressure of domestic aluminum companies to resume production and increase production. China's electrolytic aluminum output in September was 2.75 million tons, up 1.36% from the previous month and up 1.2% year-on-year. The monthly output was close to the record high of 2,755,800 tons set in June last year. However, the cumulative production of primary aluminum in January-September was 23.44 million tons, still down 1.4% year-on-year, for a continuous reduction of 8 months. In the same period, the cumulative production of primary aluminum in the world was 43.012 million tons, down 327,000 tons year-on-year, indicating that the growth rate of primary aluminum in other parts of the world is much lower than that of aluminum companies in China. Therefore, according to the latest data of the World Bureau of Metal Statistics, this year 1— In August, the global primary aluminum market supply shortage was 658,000 tons, and the gap was expanded by 274,000 tons compared with the same period of last year. The global primary aluminum consumption decreased by 299,000 tons, but the output decreased by 573,000 tons.
After entering October, although some aluminum enterprises will still increase production capacity, but at the same time domestic environmental supervision work progressed, and the aluminum industry's production capacity unchanged, the electrolytic aluminum production increase is limited, and the production pressure is relatively controllable. Since October 21, 10 inspection teams of the Ministry of Environmental Protection have settled in 20 provinces and municipalities to implement key environmental law enforcement supervision, including Henan, Shandong, Xinjiang, Qinghai and other major aluminum producing provinces. Prior to the environmental supervision in July and August, the electricity consumption of aluminum smelting enterprises was affected. In addition, China and the United States reached a consensus at the G20 summit in September to jointly address the global overcapacity of electrolytic aluminum, and electrolytic aluminum will become the focus of China's production capacity.
In summary, the short-term aluminum market resumption of production concerns the aluminum price, but its low inventory and energy properties are prominent, which has limited room for aluminum prices to fall. At the same time, in the case of rising inflation expectations and the relatively stagflation of non-ferrous metals such as copper and nickel, Shanghai Aluminum, which has a strong fundamentals, will still be the target of capital pursuit. It is expected to play the trend of the strong and strong, and the black metal The uptrend will have a new high after the new high, and the rebound resistance level above the Shanghai aluminum main contract will move up to 14,000 yuan/ton.