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After replacing the copper market with a daily limit on October 17 to become the leader in domestic metal futures, Shanghai Aluminum slipped back into adjustments in recent days. The London Metal Exchange aluminum futures edged down by US$3.0 per ton on Tuesday night. $2,704. Shanghai Aluminum opened flat on Wednesday, the main 0701 contract fell 270 points to close at 20580, closing 109900 hands.
Judging from the current trend, the price of aluminum is falling after the sharp rise, and the downturn in the alumina market does require the aluminum market to slowly digest.
Prior to the National Day, Chinalco significantly reduced the spot price of alumina from 3,800 yuan/ton to 2,950 yuan/ton. Minmetals, a major domestic minerals and metals trader, also lowered the alumina import price from RMB 3,200/ton to 12.5% ​​to RMB 2,800 on October 16. At present, the non-aluminum purchase price of the aluminum remained at 2,700 yuan/ton last week. Due to the recent sharp increase in non-Chinese aluminum-based alumina production, domestic imports are gradually declining.
However, in the medium term, the aluminum market has a more robust theme. In the London market, aluminum, like other major metals, has witnessed a new record low. The reported aluminum stocks (exchanges plus producers and Japanese port stocks) were below 3 million tons in 2006, which is equivalent to 6.5 weeks of aluminum consumption, similar to that seen when experiencing a huge price spike in the late 1980s s level. However, aluminum prices have not yet reached the record high, which is the difference between aluminum and other LME base metals. In such an environment, it is reasonable for the price to rise to $3,000/ton.
Macquarie Bank expects that global demand growth will reach 7.5% in 2006, close to 6% in 2007 and 7.5% in 2008. It is estimated that there will be a shortage of over 300,000 tons in the aluminum market in 2006, but due to the slowdown in demand growth, supply will be able to keep up with demand in 2007, and the market will be roughly balanced.
The data released by the domestic market also confirmed the strong demand for aluminum. According to new data from the General Administration of Customs, China’s exports of unwrought aluminum and aluminum products from January to September increased by 18.7% to 1.83 million tons from the same period of 2005, and exports of unforged aluminum and aluminum alloys fell by 5.8% from January to September. To 926,890 tons, but the export value increased by 21.7% year-on-year to 2.23 billion US dollars. From January to September, the export volume of semi-finished aluminum products in China increased 67.1% year-on-year to 86.65 million tons. In September, the export volume of non-forged aluminum and aluminum products was 227.49 million tons. Not only export demand, it is expected that China's total primary aluminum demand in 2006 will increase by more than 20% from 2005. Compared with the increase in aluminum production of 16.8% as of September 2006, the demand for the Chinese market has exceeded the imagination.
On the whole, we still maintain the view that the aluminum market is still in an uptrend. The previous high of 20,400 yuan for the 0701 contract will be the target for the correction, and the subsequent upward trend will stop at 22,000 yuan.
Judging from the current trend, the price of aluminum is falling after the sharp rise, and the downturn in the alumina market does require the aluminum market to slowly digest.
Prior to the National Day, Chinalco significantly reduced the spot price of alumina from 3,800 yuan/ton to 2,950 yuan/ton. Minmetals, a major domestic minerals and metals trader, also lowered the alumina import price from RMB 3,200/ton to 12.5% ​​to RMB 2,800 on October 16. At present, the non-aluminum purchase price of the aluminum remained at 2,700 yuan/ton last week. Due to the recent sharp increase in non-Chinese aluminum-based alumina production, domestic imports are gradually declining.
However, in the medium term, the aluminum market has a more robust theme. In the London market, aluminum, like other major metals, has witnessed a new record low. The reported aluminum stocks (exchanges plus producers and Japanese port stocks) were below 3 million tons in 2006, which is equivalent to 6.5 weeks of aluminum consumption, similar to that seen when experiencing a huge price spike in the late 1980s s level. However, aluminum prices have not yet reached the record high, which is the difference between aluminum and other LME base metals. In such an environment, it is reasonable for the price to rise to $3,000/ton.
Macquarie Bank expects that global demand growth will reach 7.5% in 2006, close to 6% in 2007 and 7.5% in 2008. It is estimated that there will be a shortage of over 300,000 tons in the aluminum market in 2006, but due to the slowdown in demand growth, supply will be able to keep up with demand in 2007, and the market will be roughly balanced.
The data released by the domestic market also confirmed the strong demand for aluminum. According to new data from the General Administration of Customs, China’s exports of unwrought aluminum and aluminum products from January to September increased by 18.7% to 1.83 million tons from the same period of 2005, and exports of unforged aluminum and aluminum alloys fell by 5.8% from January to September. To 926,890 tons, but the export value increased by 21.7% year-on-year to 2.23 billion US dollars. From January to September, the export volume of semi-finished aluminum products in China increased 67.1% year-on-year to 86.65 million tons. In September, the export volume of non-forged aluminum and aluminum products was 227.49 million tons. Not only export demand, it is expected that China's total primary aluminum demand in 2006 will increase by more than 20% from 2005. Compared with the increase in aluminum production of 16.8% as of September 2006, the demand for the Chinese market has exceeded the imagination.
On the whole, we still maintain the view that the aluminum market is still in an uptrend. The previous high of 20,400 yuan for the 0701 contract will be the target for the correction, and the subsequent upward trend will stop at 22,000 yuan.