A Survey of the Price Trend of Aluminum Ingot in September

In September, domestic aluminium ingot prices rose first and then fell. Taking the Mid-Autumn Festival as a turning point, two reverse trends were opened, and the overall operation was “bridge” type. Previous prices of aluminium ingots continued to run strongly in August. According to data from business associations, the average market price of aluminium (99.70) on September 12 was 14563.33 yuan/ton, up 1.91% from the average market price of 14290 yuan/ton on September 1, and 4.87% from the average market price of August 1, 13886.67 yuan/ton. Returning after the festival, the price of aluminium ingots began to decline. As of September 27, the average market price of aluminium (99.70) was 14046.67 yuan/ton, with a monthly decline of 1.70%.

Affected by the production reduction factors in August (the successive production reduction incidents in Weiqiao, Xinfa and Aba Aluminum Plant in Shandong Province, the partial closure of Zhongwang Aluminum Industry and the replacement and reduction of Jinning Aluminum and Magnesium Production Capacity), the price of aluminium ingots has risen sharply, touching the 14550 front line and reaching the annual peak.

In view of the fact that Indonesia’s bauxite has far less impact on the aluminium industry than its nickel mine’s importance, after the enthusiasm of the market, the price of aluminium ingot failed to replicate the crazy trend of “demon nickel”. After a slight increase, it quickly returned to the rational price, and the price is now lower than the price at the time of news.

September industry unexpected news

The Emergency Command of Heavily Polluted Weather in Luliang City decided to implement mandatory emission reduction measures including the aluminum industry (from 0:00 on September 25 to 24:00 on October 2). It is reported that the effect of this measure on alumina in Luliang City is greater than that of electrolytic aluminium and prebaked anode. According to the estimated operating capacity, if strictly implemented, the output of alumina and electrolytic aluminium will be affected by this policy, which is about 120,000 tons and 0.15 million tons respectively.

On September 26, the executive meeting of the State Council decided to abolish the linkage mechanism of coal and electricity prices from January 1 next year and change the benchmark price mechanism into a market-oriented mechanism of “benchmark price + fluctuation”. The meeting decided to seize the opportunity when the current coal-fired power generation market-oriented trading volume has accounted for about 50% and the electricity price is significantly lower than the benchmark electricity price. For the electricity that has not yet achieved the market-oriented trading, the benchmark price is determined according to the electricity price on the benchmark across the country. The floating range is not more than 10%, and the floating range is not more than 15% in principle. The specific electricity price is determined by supply and demand. Negotiations or bids are made between the two sides, but they will not rise for the time being next year. In particular, it is necessary to ensure that the average price of electricity in general industry and commerce does not fall or rise.

Export Ring Ratio of Aluminum Foil Products Moved Down in August

Customs data show that in August 2019, China exported 981,000 tons of aluminium foil products, down 13.32% annually, down 9.85% year-on-year, and the total export volume of aluminium foil in January-August this year was 881,500 tons, an increase of 5.04% compared with the same period last year. Among them, in August, the ring ratio of products with tax deduction code number 76071120 increased by 9.06%, while the ring ratio of aluminum foil products with other four tax code numbers decreased by 13-16%.

Expected market outlook

The price of raw material alumina has basically hit the bottom, the basic fundamentals of electrolytic aluminium are good, and the price regression is basically in place. It is expected that the near future shocks will be the main operation, and the actual demand changes downstream will be paid attention to in the later period.