On February 10, the average market price of domestic aluminum ingots in East China was 23,303.33 yuan/ton, an increase of 7.92% from the average market price of 21,593.33 yuan/ton at the beginning of the month (2.1); compared with the average market price of 20,370 yuan/ton at the beginning of January (January 1) , rose 9.43%.
With the peak in 2021 (October 19, 2021), the average market price of aluminum ingots is 24,240 yuan/ton, and the recent deviation from the peak has dropped by 3.86%. Starting from the recent recovery (December 13, 2021), the average market price of aluminum ingots is 18,693.33 yuan / ton, a recent increase of 24.66%.
There are three internal reasons for the recent strong performance of aluminum prices:
1. The circulation of aluminum ingots in some areas of Guangxi was blocked due to public health events, and the inventory of aluminum ingots in Baise basically changed to the inventory in the factory area; and Baise City is the largest aluminum production capacity city in Guangxi. According to data, the production capacity of electrolytic aluminum in Guangxi is about 2.82 million tons. Among them, Baise’s electrolytic aluminum has a built capacity of 2.32 million tons, accounting for more than 80% of Guangxi’s total production capacity, while Guangxi’s electrolytic aluminum operating rate has been insufficient due to power and other reasons. As of the end of January, Guangxi’s electrolytic aluminum operating capacity was about 1.98 million tons, of which Baise The operating capacity of electrolytic aluminum is 1.73 million tons, accounting for 4%-5% of the national operating capacity.2. On the cost side, alumina prices rose slightly. Affected by the Winter Olympics, the operating capacity of alumina in Shanxi, Shandong and Henan has been reduced to about 15 million, with an average daily production reduction of 40,000 tons. After the festival, the inventory has been digested more, and the demand for replenishment of aluminum plants is large.
3. In terms of inventory data, the social inventory data for the Spring Festival is good. As of the 7th, the domestic social inventory of aluminum ingots is 866,000 tons, which is not much compared with the pre-holiday accumulation. In addition, there are more export orders from downstream enterprises recently, and the market sentiment rise.The external factors are mainly concentrated in the production reduction problem caused by the European energy problems in the early stage.
Market outlook is expected
The fundamentals of aluminum ingots have improved recently, and demand is expected to rise. Considering that emergencies are likely to end within half a month with domestic efficiency, follow-up circulation is smooth, and the expectation of production reduction and shutdown subsides, aluminum prices must be suppressed to continue to rise. It is expected that the upper limit of aluminum prices in the short term is 24,000 yuan / ton.
