Spot market weakness The research data of Guangzhou Kai Investment Commodity Information Consulting Company showed that China's electrolytic aluminum production in 2011 was 19.7 million tons, a year-on-year increase of 15.8%, and the production capacity was 26 million tons, a year-on-year increase of 10.6%, and the capacity utilization rate was 75.7%. It is understood that the total social inventories in Shanghai, Wuxi, Hangzhou, and the South China Sea currently exceed 850,000 tons. At the beginning of November last year, the social inventory in the four regions was only about 400,000 tons. In just four months, it has doubled. many.
"Upstream production capacity surplus, lack of downstream demand, good news, and enthusiasm of the participants are not high, is the main reason for the current weakness in the electrolytic aluminum spot market." Yang Xiaoguang, Jin Rui futures metal researcher said that due to lack of downstream demand, electrolytic aluminum spot prices The volatility is small and the futures market is not very active. “Shanghai Aluminum’s main contract now has a daily volume of less than 10,000 contracts, and the daily volume at the peak of August last year reached 500,000 hands.â€
Terminal demand is low According to industry insiders, construction, transportation and power electronics industry is the main force of electrolytic aluminum consumption. The construction industry uses the largest amount of aluminum, accounting for 39% of the total amount of electrolytic aluminum, aluminum for the transportation industry accounts for 18.2% of the total, and the amount of aluminum for the power electronics industry accounts for 9.2% of the total.
“Our customers are mainly Shenzhen real estate builders, and the overall demand for these builders has dropped this year. At present, the domestic real estate market is sluggish, and the national real estate control policy has not been loosened, so I feel that this year’s sales may not be optimistic. "Zhu Xinqing said.
It is understood that since the beginning of this year, downstream terminal manufacturers in the East China and South China regions have experienced a nearly 20% decline in production orders compared with the same period. The reduction in sales has caused companies to accumulate a large amount of inventory. In order to control costs, some large home appliance companies also conducted large-scale layoffs.
Huang Fulong, a researcher at Guangzhou Kai Investment Commodity Information Consulting Co., said that the reduction in the consumption of electrolytic aluminum is a realistic reflection of the current economic situation. “At present, the real estate market is in the doldrums, and the automotive and home appliance industries are sluggish and sales are difficult. Some terminal manufacturers themselves have a large inventory of finished products and it is difficult for raw materials to be in short supply.â€
The possibility of upward price is even higher. “Even though it is difficult to increase demand in the short term, the current price of electrolytic aluminum does not have much room for growth,†Yang Xiaoguang said. Currently, the spot price of electrolytic aluminum is close to the cost price and is supported by cost price. In addition, the second quarter is the traditional peak consumption of electrolytic aluminum, the downstream real estate operating rate is gradually warming up, the demand for electrolytic aluminum will be improved.
“The possibility of the aluminum price rising is higher, but whether it can get out of weakness and there is a substantial increase, we need to refer to the new monetary policy after the two sessions and the related policies of real estate, automobiles, home appliances and other industries, as well as new conditions in the international market. Huang Fulong suggested that electrolytic aluminium downstream processing companies can carry out some hedging operations properly in the case of rising prices of electrolytic aluminum. Compared with domestic and foreign countries, the volatility of electrolytic aluminum prices is even greater. The processing companies that import electrolytic aluminum from foreign countries can appropriately increase the hedging efforts.
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