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China's Aluminum Prices In The Highest Level Within Last Past Six Years, Overseas Electrolytic Aluminum Market In Short Supply


With the deepening of China's electrolytic aluminum to the production capacity, aluminum aluminum high. Since August 9 station 16,000 yuan / ton, the current aluminum prices remained basically in the past six years since the new high position.


August 28, Shanghai aluminum main contract fell 1.15% to 16365 yuan / ton. But this price has risen about 23% from the beginning of 2017, up nearly 52% from the beginning of 2016. With the rise in China's aluminum prices, some organizations pointed out that overseas electrolytic aluminum market has been in short supply.


Followed by iron and steel, electrolytic aluminum in 2017 officially opened the industry to clean up the rectification curtain. April 12, the National Development and Reform Commission, Ministry of Industry, Ministry of Land and Resources, the Ministry of Environmental Protection of the four ministries jointly issued "clean up the electrolytic aluminum industry illegal activities of the special action program notice" (Development and Reform Office Industry [2017] No. 656, "656").


656 clearly stated that the clean-up and rectification of special operations to be completed within 6 months, clean up the object is from 2004 to May 2015 illegal construction, built electrolytic aluminum project. And in this clean-up within the scope of the illegal production capacity, accounting for the current national electrolytic aluminum production capacity of more than 10% of the huge impact on the market.


In addition, in the 656 before the text, another regulatory policy has been the first to stimulate the price of aluminum. In February 2017, the Ministry of Environmental Protection, the National Development and Reform Commission, the Ministry of Finance and the National Energy Bureau of the four departments, and Beijing, Tianjin, Hebei, Shanxi, Shandong, Henan six provinces and municipalities jointly issued the "Beijing-Tianjin-Hebei and the surrounding areas 2017 air pollution prevention and control work program ". The coverage of the work program covers the Beijing-Tianjin-Hebei air pollution transmission channel, a total of "2 + 26" cities.


Among them, electrolytic aluminum and its supporting industries were included in the production of key industries. Heating season, the pressure on the production measures on the expressly mentioned, around the heating season electrolytic aluminum plant limited production of more than 30% to stop the number of electrolytic cells; alumina production limited to about 30% to the production line; carbon enterprises can not achieve special emissions Limit, all stop production, to achieve special emission limits, limited production of more than 50% to the production line.


At that time, there were industry analysis, "2 + 26" city involving electrolytic aluminum operating capacity of about 12.4 million tons / year, accounting for 33% of the total operating capacity; alumina operating capacity of about 25.1 million tons / year, accounting for the total capacity of the country 36%; aluminum carbon production capacity of about 8.3 million tons / year, accounting for 43% of the total operating capacity. The winter heating season since the beginning of October, to the end of the following year in March, a total of 6 months.


It is worth mentioning that since August 9 since the rapid rise in aluminum prices until the break 16,000 yuan / ton mark, and the recent industry leading enterprises to shut down the actual production capacity.


On August 8, the Shandong provincial government jointly issued nine other departments issued instructions, before the end of July, Shandong Province Weiqiao Venture Group (hereinafter referred to as "Wei Bridge") and the letter of the Group (the next Called "letter fat") illegal construction of electrolytic aluminum production capacity of 3.21 million tons, will be shut before the end of July. Among them, Weiqiao illegal construction of electrolytic aluminum project 5, illegal production capacity of 2.68 million tons; letter of illegal production capacity of 530,000 tons. The two companies shut down the illegal production capacity, accounting for more than 7% of the total capacity.


Subsequently, on August 21, the Ministry of Environmental Protection, the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Public Security, the Ministry of Finance, the Ministry of Housing, Urban and Rural Development, the Ministry of Transport, SAIC, General Administration of Quality Supervision, Energy Bureau, Beijing People's Government, Tianjin Municipal People's Government, Hebei Provincial People's Government, Shanxi Provincial People's Government jointly issued "Beijing-Tianjin-Hebei and the surrounding areas 2017 - 2018 autumn and winter air pollution comprehensive management tackling action program."


Compared to the previous February release of the program, involving the part of the non-ferrous industry and then add one, that is, color reproduction industry casting process, heating season limit of 50%.


In addition, electrolytic aluminum production capacity policy continues to tighten. August 23, the State Council held a standing meeting proposed to take effective measures to ensure the completion of this year to resolve the excess capacity of steel and coal, the disposal of "zombie enterprises" and governance of poor enterprises and other tasks, to promote thermal power, electrolytic aluminum, building materials and other industries to reduce production, Strict control of new capacity. The news came out, when the night price of aluminum rose more than 2%, a new high.


It is worth mentioning that, as China's aluminum prices continue to push up, the international market is feeling the pressure in short supply. According to Huatai colored securities team reported that overseas electrolytic aluminum has been in a state of short supply, with the Chinese side of the supply side of the reform, the world may enter the short supply stage, when there may be LME (London Metal Exchange) and the same period with the same The trend of falling. The previous three years, overseas electrolytic aluminum are oversupply state.


Aluminum prices rose at the same time, the industry is still concerned about another phenomenon, that is, persistent high prices of electrolytic aluminum stocks. According to "My Colored Net" statistics, August 28, the country's major market electrolytic aluminum stocks to 1.154 million tons, the statistics at the beginning of this year to 363,000 tons. This means that this year, China's electrolytic aluminum inventories has actually increased by more than 3 times.


However, under the general trend of production, the impact of high inventory does not seem to appear. JP Morgan analyst pointed out recently that although China's aluminum inventories this year, an increase of more than 3 times, but the supply side reform has been a good support for aluminum prices, aluminum prices in the fourth quarter is expected to be 100 US dollars per ton Continue to rise again


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