Electricity restriction resumes, aluminum futures prices will rise slightly in the short term

Recently, power supply in the south has become tight again, Guangxi and Yunnan regions have started power-cutting policies again, and Yunnan’s power-cutting policies for electrolytic aluminum have been upgraded. As a result, the production of electrolytic aluminum enterprises will be affected again, and the supply of electrolytic aluminum will be tight. It will continue to be maintained, but the regulatory authorities have made it clear that they want to maintain supply and stabilize prices. Recently, the second batch of State Reserve aluminum ingots have been dumped. It is not ruled out that subsequent dumping of reserves will not be ruled out. The state’s attitude to restrain the rapid rise of commodity prices will restrict the upward strength of aluminum prices. . On the whole, under the boost of the supply stage, the short-term aluminum price may rise slightly, pay attention to the 20,000 first-line pressure.

The price of raw materials is high, and the cost support of electrolytic aluminum is strengthened

In the medium and long term, due to the impact of “carbon peak” and “carbon neutrality”, more clean energy will be put into use, and the production of thermal coal will be suppressed. But in the short term, this summer, my country will consume electricity in many places A record high has led to a strong demand for thermal coal. In the short term, the supply of thermal coal is tight and the demand is strong, leading to continued high thermal coal prices. As of July 29, the price of thermal coal in Qinhuangdao was 1072.5 yuan/ton. As far as the production cost of electrolytic aluminum is concerned, the cost of electricity accounts for about 35%. Therefore, the high price of thermal coal will strengthen the cost support of electrolytic aluminum.

Electricity restriction resumed, and the production of electrolytic aluminum production capacity was suppressed

In mid-May of this year, the peak power rationing in Yunnan caused the local electrolytic aluminum companies to be unable to produce at full capacity. In July, the power supply in West Inner Mongolia also began to be tight. The peak power rationing began in mid-July. Local electrolytic aluminum manufacturers The start of construction has also been affected. On the whole, the peak power consumption of this summer has caused a shortage of electricity, which has also affected the production of electrolytic aluminum.

According to Aladdin’s investigation and understanding, due to the rapid increase in the load of the Southern Power Grid, the aluminum enterprises in Guangxi are facing the pressure of orderly use of electricity to varying degrees, and a new electrolytic aluminum project is temporarily postponed. In addition, the electrolytic aluminum enterprises in Yunnan area were again required to limit the load. This time the limit reached 30%. Even in May, the supply of electrolytic aluminum was tightened again due to the power limit, and aluminum prices would be boosted.

Inventories continue to fall, and the dollar weakens in the short term, boosting aluminum prices

In terms of demand, the real estate and automobile industry data of the end-demand industries still performed well. Although the production and sales data of the automobile industry showed negative growth in the past two months, the State Council Information Office released a press conference on July 23. Director Zhu Xiaoliang said that in the next step, the Ministry of Commerce will work with relevant departments to promote automobile consumption in the whole chain. With the support of policies, it is expected that the performance of my country’s auto market this year will not be too bad. In addition, new energy industries, such as photovoltaic cables, also use aluminum. The photovoltaic market has also performed well this year, which will also boost the demand for aluminum.

In terms of social inventory, as of July 29, the social inventory of electrolytic aluminum in the five locations according to SMM’s statistics was 758,000 tons, a decrease of 51,000 tons from last week. Inventory in the same period last year was 712,000 tons. The decline in inventories is still strong, indicating that the production restrictions of electrolytic aluminum enterprises have caused tight supply in the aluminum market, and inventories continue to be consumed. In addition, judging from the seasonal trend chart, after entering the second quarter, the social inventory of electrolytic aluminum has started the process of de-allocation. This process is expected to continue until the end of the year, and the inventory is expected to continue to provide support for aluminum prices.

On the macro front, the Federal Reserve announced that it will not raise interest rates temporarily, which has alleviated market concerns about tightening liquidity in the short term. From the perspective of US economic data, the actual annualized quarterly rate of GDP in the second quarter of the United States was initially 6.5%, and the previous value was 6.4%. 8.5% indicates that the U.S. economic recovery has not been smooth. Moreover, although the number of non-agricultural employment in the U.S. in the past two months has been better than expected, the unemployment rate is still not ideal, and it will take some time for the job market to recover. There are still some twists and turns. The short-term Fed is less likely to tighten liquidity. The US dollar index may enter a short-term correction soon, which will benefit aluminum prices.

Although there are many positive factors at present, the excessively high prices of bulk commodities have aroused continuous attention from the regulatory authorities, and the second batch of aluminum ingots has begun to be sold out by the State Reserve. With the continuous attention of the regulatory authorities, the upward movement of aluminum prices will definitely be affected, and it is expected that the upward space of aluminum prices will be relatively limited.

In summary, the high thermal coal price has strengthened the support of the production cost of electrolytic aluminum, and the power curtailment policy is coming again, the production of electrolytic aluminum enterprises continues to be affected, and the aluminum supply side continues to be disturbed. From the perspective of demand, the performance of the real estate and automobile data in the terminal industry is acceptable, indicating that my country’s economy has continued to recover due to the proper control of the epidemic, and the US economic recovery is not smooth. The performance of the main macro data is average, and the short-term Fed rate hike is unlikely. The U.S. dollar will also undergo a short-term correction, which is good for aluminum prices, but the continued attention of my country’s regulators on bulk commodities will restrict the upward strength of aluminum prices. On the whole, there are still many bullish factors for the current aluminum price. It is expected that the short-term aluminum price will fluctuate upwards, and we will pay attention to whether the 20,000 first-line integer mark can be broken again. (Guangzhou Futures Li Jun)

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