As of 4 p.m. Beijing time on February 25, the terminal of China stock market news choice showed that the London Metal Exchange reported that the comprehensive aluminum 03 contract (Code: lalt) (hereinafter referred to as Lun aluminum) fell 2.03%. However, in terms of lengthening the cycle, the largest increase in recent four months was 42.15%.
In this regard, some people believe that the tense geopolitical situation and the intensification of military conflict have a certain negative impact on the main aluminum ingot exporting countries, and the superposition of inflation, rising energy, poor logistics, low inventory and booming downstream demand constitute a good support for China International Aluminum futures. In addition, the “double carbon” target policy actively shrinks China’s aluminum production capacity, which is good for listed aluminum enterprises with self owned power plants, self owned coal mines, circular economy model and export foreign exchange earning business. In particular, the three sub sectors of green power aluminum, recycled aluminum and export aluminum will have a positive effect.
the strength of aluminum price stems from supply and demand
various factors push up aluminum price
At the close of 3 p.m. Beijing time on February 25, China stock market news choice terminal showed that the main contract of Shanghai aluminum closed at 22510 yuan / ton, and the current price is still relatively high. In the past four months, the main contract of Shanghai aluminum rose from the low point of 18158 yuan / ton to the high point of 23837 yuan / ton, with a cumulative increase of 31.27%. The performance of the main contract of Shanghai aluminum was even stronger than that of Shanghai gold in the same period
the main contracts of Shanghai aluminum industry rose continuously (source: China stock market news)
Vice president of the school of economics and trade, Hunan University Professor Cao Erbao, the doctoral supervisor, analyzed that: “Geopolitical tensions and intensified military conflicts are only the superficial factors for the rise of global metal prices, and the underlying factors are still the pattern of supply and demand. Due to the rising energy prices in the upstream, the low inventory of aluminum ingots in various countries and the booming demand in downstream subdivided industries, aluminum is stronger than gold in China and the world Situation. ” “Since the beginning of this year, the global energy shortage has intensified, and the prices of international crude oil and natural gas have increased significantly. Electrolytic aluminum is a high energy consumption industry. Energy shortage, economic sanctions and geographical conflicts have an adverse impact on the commencement of overseas electrolytic aluminum production capacity, which may have a certain impact on the downstream of the global aluminum supply chain.”
According to the announcement data, Rusal (H-share Code: 00486) (hereinafter referred to as Rusal) is the second largest electrolytic aluminum producer in the world. The output of electrolytic aluminum in 2021 was 3.76 million tons, accounting for 5.6% of the global supply. The total output of alumina in 2021 was 8.3 million tons, accounting for 10.7% of the global supply. In addition, Rusal’s alumina production in Ukraine is 1.74 million tons, accounting for 20.1% of the company’s alumina production capacity. According to SMM statistics, the operating capacity of electrolytic aluminum in Western Europe is 3.26 million tons / year. At present, the production is reduced by more than 800000 tons / year, accounting for 1.1% of the global market capacity. Previously, in 2018, the London Futures Exchange suspended the aluminum ingot delivery of Rusal, leading to market concerns that the global aluminum supply chain entered the capacity gap cycle. The price of Lun aluminum rose 27% within 10 trading days, and the main contract price of Shanghai aluminum also rose 12%.
double carbon policy shrinks aluminum production capacity
the three market segments are profitable
How will China Aluminum Futures perform in the future? An analyst of nonferrous energy industry of a futures institution analyzed the reporter of Securities Daily: “International energy shortages, economic sanctions and geopolitical conflicts will indeed push up international aluminum prices. At the same time, there are several favorable factors for aluminum prices in China. In particular, since the implementation of the ‘double carbon’ policy, Chinese aluminum enterprises have taken the initiative to shrink production capacity. In addition, they meet the cold winter heating season and the dry season of power generation, which has a delayed effect on the resumption of work of electrolytic aluminum enterprises.”
He further stated: “From the perspective of downstream demand, although the demand for aluminum for construction slows down, the demand for rail transit, aviation manufacturing, automobile production and export is growing. This is a great advantage for aluminum enterprises with self owned power plants, self owned coal mines, circular economy and foreign exchange earning through export. The supply and demand of electrolytic aluminum is expected to remain tight, and they are optimistic about green power in the electrolytic aluminum industry The medium and long-term development trend of the three sub sectors of aluminum, recycled aluminum and exported aluminum. “
Under the favorable effect, a number of Chinese aluminum enterprises are expanding their territory in the segmented market and seizing market opportunities. At the end of 2021, Yunnan Aluminium Co.Ltd(000807) fixed value-added project was launched, raising about 3 billion yuan, of which 70% was invested in Yunnan Aluminum Wenshan green low-carbon hydropower aluminum material integration project. After the project is completed, the average annual operating revenue will reach 5.692 billion yuan and the average annual net profit will reach 327 million yuan.
Ye Chiu Metal Recycling (China) Ltd(601388) also said recently that it is accelerating the renewable aluminum industry. Its Malaysian factories plan to expand the production capacity by four times, and the procurement radius is distributed in China, the United States, Europe, Australia, Southeast Asia, etc.
Tianshan Aluminum Group Co.Ltd(002532) said that it is vigorously promoting the Indonesian project, Jingxi Tiangui phase II and phase III projects, and accelerating the construction of Xinjiang scenery base, and the self-sufficiency rate of raw materials and electricity is expected to be further improved. Shandong Nanshan Aluminium Co.Ltd(600219) said that the capacity of Indonesia’s phase II alumina project under construction is 1 million tons, which is expected to be completed and put into operation in 2022, and the capacity of recycled aluminum under construction is 100000 tons, which is expected to be put into operation in 2023.
