In September, the commodity market drew a round of “season change†market, and aluminum prices were no exception. With the advent of the consumer season, aluminum prices soared to RMB 22,800/tonne. After a short period of decline, the spot price of the Yangtze River is still stable at RMB 21,000/tonne. On September 26, Chinalco cut its alumina prices again to 2,950 yuan/ton. In just a month, the decline in alumina has reached 40%. The contradiction between the strength of spot prices and the decline in costs has intensified. The sharp decline in the cost of aluminum ingots has put pressure on the long-term trend of aluminum prices.
First of all, analyze the reason why aluminum prices rose twice this month.
In early September, Chinalco announced that it would cut the price of alumina from RMB 4,900/ton to RMB 3,800/ton, and the price of aluminum would not fall, but it would soar to RMB 22,800/ton. This round of skyrocketing has been accompanied by a spot rise of over 400 yuan / ton, indicating that the market is very tight spot. Due to the obvious reduction in production capacity of domestic electrolytic aluminum during the off-season aluminum consumption in July and August, domestic stocks have remained at around 25,000 tons. Such low inventory, coupled with reduced off-season production capacity, will lead to the upcoming aluminum season in September. At the time, short-term aluminum ingots have a supply gap. At the same time, the rumors of aluminum oxide price cuts across the market, buying up or not buying the mentality of making aluminum companies in August did not dare to prepare inventories in advance, in the premise of strong consumption, the original preparation of a large number of companies purchasing short-term stock Supply tensions. The rise in aluminum prices in the current round was caused by the short-term supply shortage.
The rise in this round since mid-September was relatively modest, and the aluminum price was steadily rising.
There are two reasons for this: First, domestic aluminum companies have the need for inventory preparation due to holiday effects. Between the arrival of the National Day holiday, the demand for aluminum ingots is relatively stable at the end of September. This also makes the spot price of the Yangtze River has been stable at 21,000 yuan / ton. The spot premium has also been further expanded to RMB 600/t or more. Such a high premium has caused futures prices to continue to make up for the difference. Second, the impact of the new export tax rebate policy: The Ministry of Finance and other five ministries jointly issued a notice on September 14. From September 15th, the export tax rebate rate for some non-ferrous metal materials fell from 13% to 5%, 8%, and 11%. In the long run, this policy is a major negative for aluminum processing and exporting companies. However, as the policy also indicates that there is a three-month buffer period, it is bound to increase the consumption of aluminum ingots in the short term, and it will seize the time to process exports and earn a later vote. From the stocks of the Shanghai Stock Exchange, it can be seen that in the second half of September, the inventory of aluminum dropped sharply from 25,000 tons to 16,000 tons. The sharp reduction in inventory also indicates that the demand for aluminum ingots in the second half of September continues to increase.
From the above analysis, it can be seen that the two price rises of aluminum prices in September were inseparable from the policy: the price of alumina was lowered and the export tax rebate was lowered. On the surface, the bad news makes the aluminum price rise somewhat puzzling, but through the phenomenon to see the essence: the price is determined by the relationship between supply and demand. The two rounds of aluminum price rises in the current round are due to the increase in demand in the short-term, caused by the periodic supply and demand gap. Bad news is a long-term factor affecting aluminum prices. It does not make much sense in the short term. It even stimulates short-term strength in aluminum prices. On the surface, aluminum prices still seem to be very strong. The question now is, how long can this kind of strength last? In other words, will this phased supply and demand relationship persist?
From a long-term perspective, it is a fact that Chinese aluminum ingots have excess capacity in the second half of the year. According to the statistics of the National Development and Reform Commission, the newly built idle capacity is 2 million tons. With the continuous production of idle capacity, the supply of primary aluminum will gradually increase in the second half of the year. In the first half of the year, the national output of electrolytic aluminum increased by only 18.1% year-on-year, while the national alumina production reached 5.95 million tons, an increase of 50.6% year-on-year. With the reduction of alumina prices, it will further stimulate the production of aluminum ingots. With the current market spending power, it is difficult to digest the continued increase in production capacity. At the same time, too rapid production capacity will bring severe pressure on China's limited copper resources, bauxite resources and power resources. The analysis of the economic performance of the aluminum industry announced in the first half of the year by the National Development and Reform Commission once again reiterated the view that the excessively rapid growth of production capacity in the aluminum smelting industry must be effectively controlled. This also shows that the country's macro-control of aluminum prices will gradually begin. With the passage of time, the power of reducing export tax rebates will gradually emerge, and the reduction of aluminum exports will directly affect the domestic demand for aluminum ingots. With the gradual increase in the supply of aluminum ingots and weaker demand, the short-term supply of aluminum ingots is unlikely to last long.
From the perspective of relative prices, we can compare the price of each previous high point.
As China is a large aluminum producer, it has a large-scale hedging order. However, China, as a global aluminum producer, does not have pricing power. Therefore, aluminum prices do not have the initiative to increase significantly, and each sharp rise in aluminum prices will trigger a corresponding hedging position.
Looking back at the trend of aluminum prices this year, it can be seen that as the price of alumina falls, the high point of aluminum price increase in each round also gradually decreases. The current price of alumina is 2950 yuan/ton. According to the cost comparison, the aluminum price is more than 20,000 yuan, which is equivalent to the previous high point. The price increase on this basis will inevitably lead to a large number of aluminum plants. Hedge selling. Therefore, from the main contract 0612 point of view, between 20,000-21,000 yuan is a head area, while the cost of alumina is declining, the center of gravity of aluminum prices will be gradually reduced.
From the capital point of view, as the price of alumina has been lowered again and the price of aluminum has risen in the opposite direction, the positions of both long and short positions have gradually changed. It is clear that the main funds are not optimistic about the long-term trend of aluminum prices. At present, the main contract 0612 main force total empty 32,000, and the main long position is only 24,000. From the perspective of the position structure, the main short sellers are the Great Wall Weiye and Qingtongxia respectively holding 7,300 and 5,400 positions. In contrast, the main long positions are average and relatively scattered. The top three main long positions add up to only 7,000. Since there is not a large-scale hedge purchase from a mainstay, it is difficult for the long main fund size to compete with the main short position. The contest between long and short sides is like the battle between the dealer and the retailer. Unless there is a large number of long funds entering the market, the long positions of the main long positions will expand, or as long as the main short positions do not lighten up, the upward pressure on aluminum prices is very large. If the current price continues to rise, due to the divergence of fundamentals, it will not only trigger more hedges, but also generate more profits. However, if the price drops, the panic will inevitably lead to a trailing stop-loss. The lack of support from the main aluminum bulls will certainly accelerate the decline.
There will be short-term divergence in the formation of any major trend, and the appearance of deviation is often the beginning of a turnaround. At present, the rise in aluminum prices is only a short-term behavior. The inverse basis of aluminum prices has also shown that the market is bearish on aluminum prices. In the short-term supply and demand relationship of aluminum ingots, the coming three-month buffer period for export tax rebates will gradually change with the end of long vacation. In the long run, the oversupply and cost reduction caused by overcapacity are destined to decline in aluminum prices in the future. From this point of view, each relatively high point of aluminum price rise in the short term is our short-selling opportunity.
First of all, analyze the reason why aluminum prices rose twice this month.
In early September, Chinalco announced that it would cut the price of alumina from RMB 4,900/ton to RMB 3,800/ton, and the price of aluminum would not fall, but it would soar to RMB 22,800/ton. This round of skyrocketing has been accompanied by a spot rise of over 400 yuan / ton, indicating that the market is very tight spot. Due to the obvious reduction in production capacity of domestic electrolytic aluminum during the off-season aluminum consumption in July and August, domestic stocks have remained at around 25,000 tons. Such low inventory, coupled with reduced off-season production capacity, will lead to the upcoming aluminum season in September. At the time, short-term aluminum ingots have a supply gap. At the same time, the rumors of aluminum oxide price cuts across the market, buying up or not buying the mentality of making aluminum companies in August did not dare to prepare inventories in advance, in the premise of strong consumption, the original preparation of a large number of companies purchasing short-term stock Supply tensions. The rise in aluminum prices in the current round was caused by the short-term supply shortage.
The rise in this round since mid-September was relatively modest, and the aluminum price was steadily rising.
There are two reasons for this: First, domestic aluminum companies have the need for inventory preparation due to holiday effects. Between the arrival of the National Day holiday, the demand for aluminum ingots is relatively stable at the end of September. This also makes the spot price of the Yangtze River has been stable at 21,000 yuan / ton. The spot premium has also been further expanded to RMB 600/t or more. Such a high premium has caused futures prices to continue to make up for the difference. Second, the impact of the new export tax rebate policy: The Ministry of Finance and other five ministries jointly issued a notice on September 14. From September 15th, the export tax rebate rate for some non-ferrous metal materials fell from 13% to 5%, 8%, and 11%. In the long run, this policy is a major negative for aluminum processing and exporting companies. However, as the policy also indicates that there is a three-month buffer period, it is bound to increase the consumption of aluminum ingots in the short term, and it will seize the time to process exports and earn a later vote. From the stocks of the Shanghai Stock Exchange, it can be seen that in the second half of September, the inventory of aluminum dropped sharply from 25,000 tons to 16,000 tons. The sharp reduction in inventory also indicates that the demand for aluminum ingots in the second half of September continues to increase.
From the above analysis, it can be seen that the two price rises of aluminum prices in September were inseparable from the policy: the price of alumina was lowered and the export tax rebate was lowered. On the surface, the bad news makes the aluminum price rise somewhat puzzling, but through the phenomenon to see the essence: the price is determined by the relationship between supply and demand. The two rounds of aluminum price rises in the current round are due to the increase in demand in the short-term, caused by the periodic supply and demand gap. Bad news is a long-term factor affecting aluminum prices. It does not make much sense in the short term. It even stimulates short-term strength in aluminum prices. On the surface, aluminum prices still seem to be very strong. The question now is, how long can this kind of strength last? In other words, will this phased supply and demand relationship persist?
From a long-term perspective, it is a fact that Chinese aluminum ingots have excess capacity in the second half of the year. According to the statistics of the National Development and Reform Commission, the newly built idle capacity is 2 million tons. With the continuous production of idle capacity, the supply of primary aluminum will gradually increase in the second half of the year. In the first half of the year, the national output of electrolytic aluminum increased by only 18.1% year-on-year, while the national alumina production reached 5.95 million tons, an increase of 50.6% year-on-year. With the reduction of alumina prices, it will further stimulate the production of aluminum ingots. With the current market spending power, it is difficult to digest the continued increase in production capacity. At the same time, too rapid production capacity will bring severe pressure on China's limited copper resources, bauxite resources and power resources. The analysis of the economic performance of the aluminum industry announced in the first half of the year by the National Development and Reform Commission once again reiterated the view that the excessively rapid growth of production capacity in the aluminum smelting industry must be effectively controlled. This also shows that the country's macro-control of aluminum prices will gradually begin. With the passage of time, the power of reducing export tax rebates will gradually emerge, and the reduction of aluminum exports will directly affect the domestic demand for aluminum ingots. With the gradual increase in the supply of aluminum ingots and weaker demand, the short-term supply of aluminum ingots is unlikely to last long.
From the perspective of relative prices, we can compare the price of each previous high point.
time
Alumina price (yuan/ton)
Corresponding to the electrolytic aluminum price at that time (yuan/ton)
May 2006
5650
24000
September 2006
3800
22000
October 2006
2950
Expected to be 20,000
As China is a large aluminum producer, it has a large-scale hedging order. However, China, as a global aluminum producer, does not have pricing power. Therefore, aluminum prices do not have the initiative to increase significantly, and each sharp rise in aluminum prices will trigger a corresponding hedging position.
Looking back at the trend of aluminum prices this year, it can be seen that as the price of alumina falls, the high point of aluminum price increase in each round also gradually decreases. The current price of alumina is 2950 yuan/ton. According to the cost comparison, the aluminum price is more than 20,000 yuan, which is equivalent to the previous high point. The price increase on this basis will inevitably lead to a large number of aluminum plants. Hedge selling. Therefore, from the main contract 0612 point of view, between 20,000-21,000 yuan is a head area, while the cost of alumina is declining, the center of gravity of aluminum prices will be gradually reduced.
From the capital point of view, as the price of alumina has been lowered again and the price of aluminum has risen in the opposite direction, the positions of both long and short positions have gradually changed. It is clear that the main funds are not optimistic about the long-term trend of aluminum prices. At present, the main contract 0612 main force total empty 32,000, and the main long position is only 24,000. From the perspective of the position structure, the main short sellers are the Great Wall Weiye and Qingtongxia respectively holding 7,300 and 5,400 positions. In contrast, the main long positions are average and relatively scattered. The top three main long positions add up to only 7,000. Since there is not a large-scale hedge purchase from a mainstay, it is difficult for the long main fund size to compete with the main short position. The contest between long and short sides is like the battle between the dealer and the retailer. Unless there is a large number of long funds entering the market, the long positions of the main long positions will expand, or as long as the main short positions do not lighten up, the upward pressure on aluminum prices is very large. If the current price continues to rise, due to the divergence of fundamentals, it will not only trigger more hedges, but also generate more profits. However, if the price drops, the panic will inevitably lead to a trailing stop-loss. The lack of support from the main aluminum bulls will certainly accelerate the decline.
There will be short-term divergence in the formation of any major trend, and the appearance of deviation is often the beginning of a turnaround. At present, the rise in aluminum prices is only a short-term behavior. The inverse basis of aluminum prices has also shown that the market is bearish on aluminum prices. In the short-term supply and demand relationship of aluminum ingots, the coming three-month buffer period for export tax rebates will gradually change with the end of long vacation. In the long run, the oversupply and cost reduction caused by overcapacity are destined to decline in aluminum prices in the future. From this point of view, each relatively high point of aluminum price rise in the short term is our short-selling opportunity.
Stainless Steel Roller Shutter Door
Using advanced 201 stainless steel sheet, precision roll forming production process.
User-friendly design, stylish,durable ,safe anti-theft ,lighting, ventilation ,aesthetic ,practical, thermal insulation and free adjustable ,anti-peeping.
Intelligent control, multiply driving modes.
Variety of colors and styles optional.
Providing a comprehensive,specialized system solutions as users different requirements.
Integrated protection and decorative features together,the best replacement of traditional theft network security replacement; flexible way open ways, supporting hand control, group control. The door could be your safe rescue channel when in emergency.
Stainless Steel Roller Shutter Door,Remote Control Roller Shutter Door,Stainless Steel Grille Roller Shutter Door,Electric Stainless Steel Roller Shutter Door
Shenzhen Hongfa Automatic Door Co., Ltd. , https://www.spiralfastdoor.com