Aluminum prices fluctuated upward in August

In early August, the average price of aluminum ingot spot market fluctuated at a high level, with an operating range of 19700-19900 yuan / ton.

According to the data of business agency, the average market price of domestic aluminum ingots in East China on August 10 was 19903.33 yuan / ton, up 0.13% from 19856 yuan / ton at the beginning of the month.

Taking the average market price of 15726.67 yuan / ton of aluminum ingots at the beginning of the year (January 1, 2021) as the benchmark price, it has increased by 26.43%.

Power rationing in Guangxi is becoming more and more strict, and power rationing and production reduction affect domestic supply

The power limitation of electrolytic aluminum in Southwest China is becoming more and more strict. China Southern Power Grid Guangxi company requires the electrolytic aluminum plants in Guangxi Province to further reduce the power load by 30%. The aluminum plants using China Southern Power Grid need to reduce the current operating capacity by 30%. It is preliminarily estimated that the annual operating capacity of Guangxi will be reduced by about 270000 tons by the end of August, and the resumption time of production is to be determined.

According to statistics, since 2021, the operating rate of electrolytic aluminum enterprises in five provinces has decreased due to the power restriction policy. According to the published data, the planned and reduced production capacity has reached 1.626 million tons / year, accounting for 3.7% of the annual production capacity in China.

In July, Yunnan electrolytic aluminum plant may be required to raise its production limit to 30% from the previous 25%. Electrolytic aluminum plants in Guizhou and Guangxi also began to limit power slightly two weeks ago. Some aluminum enterprises chose to carry out annual maintenance in advance or reduce load a little. The power restriction requirements became stricter, and Guizhou enterprises were required to cooperate with staggered peak power consumption. In July, there was little hope for the resumption of production capacity shut down in Yunnan, with a monthly reduction of more than 70000 tons. Guangxi power grid issued an orderly power consumption notice of 3 million million kilowatts of load reduction due to wrong peak avoidance, including 500000 kilowatts of load reduction of Baise power grid, 300000 kwh of load reduction of Laibin Power Grid and 360000 kwh of load reduction of Nanning Power Grid. According to the local load reduction demand, the electrolytic aluminum production capacity in the region may affect or exceed 100000 tons.

The cost side increased slightly

It is roughly estimated that the average cost of electrolytic aluminum industry will generally rise in 2021, with an increase of 11-12% compared with the beginning of the year, and the corresponding increase of aluminum price is 26%. The rising cost side is mainly due to the rising price of electricity price and raw alumina.

Future forecast

August is in the off-season, and domestic demand is expected to slow down, which poses a certain downward risk to aluminum price. However, the production capacity is reduced due to the cost and power restriction. At present, the market inventory is small, which supports the aluminum price.

Ye Jianjun, an analyst of business society, believes that the current price range of 18500-20000 yuan / ton is a steady-state shock range formed by the market game. It is expected that the aluminum ingot price will still operate around 19000 yuan / ton in the near future. On the whole, the short-term downward risk will be weakened and the high shock operation will still be maintained.