Analyze the important factors affecting aluminum price changes at home and abroad

First, the international market

1. The current market supply and demand relations

(1) The output continues to grow. According to preliminary data from IAI, the average daily output of primary aluminum in the world in June 2005 increased to 64,700 tons, from 64,000 tons in May to 61,600 tons in June 2004. According to IAI, the total output of primary aluminum was 1.941 million in June 2005. Tonnes were 1.985 million tons in May and 1.849 million tons in June 2004.

(2) Consumption is still relatively strong. From a global perspective, despite the lower-than-expected orders in the second quarter, demand still maintained a relatively strong pace of growth. According to data from the CRU, global aluminum consumption reached 15.658 million tons in the first half of this year, compared with 14.961 million tons in the same period of last year.

(3) Increase in inventory. The IAI report shows that all forms of aluminum stocks held by Western producers (excluding finished finished products) have risen to 3.278 million tons in May, which is also the highest point in the past two years.

2. The important factors affecting the aluminum price changes

(1) Impact of rising energy costs on European producers

a In recent months, market participants have argued about high electricity prices in some European countries with traditional industrialization. With the expiration of current electricity contracts and the implementation of new contracts, the cost of aluminum producers may increase substantially, threatening them. To some smelter operations. The focus of the market is Germany, which currently has about 670,000 tons of smelting capacity per year, but may have only 158,000 tons per year before 2007.

b High electricity prices are not just a problem for Germany, and smelters in other European countries (such as France, Switzerland and the Netherlands) are also facing the threat of rising energy costs. At the same time, Hydro reiterated plans to close the Norwegian smelter with a total capacity of 70,000 tons per year by the end of 2006. In Eastern Europe, Magyar Aluminium has stated that higher power consumption and electricity prices will force it to start early next year. It started to close its Hungarian Inota smelter with an annual capacity of 35,000 tons.

c. Overall, in the next few years European regions (including Western and Eastern Europe) will likely lose more than 1 million tons of smelting capacity due to the closure of smelters. Although some of the smelting capacity may be able to be preserved (due to political pressure, power subsidies, and trade union resistance, etc.), the rest will only be forced to close. This is based on a simple economic reason. Manufacturing facilities cannot always lose money.

(2) Impact of China's policy changes on the international market

a More recent news came again that the alumina processing trade restriction policy of the industry will be announced in July. Regardless of whether it is announced or slightly later, it is certain that the government's attitude toward canceling alumina alumina processing is still relatively clear. It is only time and the time will not be delayed. The promulgation of this policy will certainly have an impact on the global aluminum supply pattern, and will exert influence on the domestic industrial structure and industrial level.

b. Once the preferential treatment of alumina processing trade is cancelled, it will obviously benefit the international market. According to the newly released data released by the Customs, from January to June 2005, exports of unforged aluminum and aluminum increased by 34.6% year-on-year to 1,094,831 tons, of which about 80% of total exports of electrolytic aluminum were exported through the processing trade. . This shows that after the cancellation of preferential policies, China's exports will be greatly reduced, so that the international aluminum prices remain strong.

3. Supply and demand balance sheet.

Source: WBMS

International Market Summary:

Based on the above analysis, it seems that the world aluminum market is unlikely to have significant room for growth. However, on the other hand, we can see that WBMS's average price forecast for the next two years is 1822 US dollars and 1750 US dollars, not low. From the perspective of market performance, after the aluminum price fell below $1,700, the fund was involved in a large amount and quickly pushed aluminum prices above $1800. Therefore, the aluminum market in the world is likely to be a big box oscillating pattern, and it is unlikely that there will be a deep drop. In particular, the existence of the following two stimulus factors is more likely to push aluminum prices to remain firm.

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