In the short-term good news, aluminum ingot stocks high fundamentals, the Shanghai aluminum continued callback. With the new production in January and the resumption of production news one after another, superimposed seasonal off-season consumption, aluminum stocks may continue to accumulate, aluminum prices will decline further.
Some of the production capacity has been put into operation conditions
According to the current price of alumina 2900 yuan / ton, the weighted average cost of electrolytic aluminum industry in 14000-15000 yuan / ton. According to Aladdin’s research, with the continuous replacement of indicators, 2.79 million tons of construction-in-production capacity will be put into operation in 2017, and it is estimated that in the first quarter of 2018, China will start production of 1.402 million tons of electrolytic aluminum. The new production capacity will mainly focus on Inner Mongolia and Guangxi. As the index replacement has been completed, and the market does not appear new to capacity-building policies, electrolytic aluminum cost has become the key factor restricting the enthusiasm of enterprises.
Electrolytic aluminum costs or continue to decline
Specific analysis, since January, the cost of alumina has fallen below 3,000 yuan / ton mark, the shortage of natural gas in Shanxi alleviate the shortage of natural gas in the region due to the resumption of production of alumina enterprises, alumina supply will continue to increase, Taking into account the price continued to fall or trigger upstream support plate, alumina is expected to hover around 2,900 yuan / ton.
At present, the anode carbon block oscillates at a high level, but the demand is shrinking and the market turnover is subdued. It is understood that Weiqiao prebaked anode purchase price in January is still negotiable, Weiqiao proposed a drop of 150 yuan / ton, carbon enterprises have not yet accepted. Therefore, in general, the cost of electrolytic aluminum may not be a limiting factor in the capacity of electrolytic aluminum.
Domestic aluminum ingot inventories are still at record highs
January 4, according to statistics, China’s 12 areas of aluminum ingot inventories increased 25,800 to 1,697,600 tons, the increase in inventories is mainly reflected in the Wuxi area. According to statistics, the inventories of seven domestic aluminum ingots totaled 1.774 million tons, an increase of 12,000 tons from last Thursday. Domestic aluminum ingot social stock was 1.757 million tons, an increase of 10 thousand tons. With the first quarter of new production capacity and production gradually put into operation as well as the northern rain and snow led to the arrival of blocked aluminum ingot, aluminum ingot inventories continued to record highs in the first quarter is difficult to alleviate the pressure on the stock.
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Short-term domestic market as a whole gloom than the trading atmosphere, and LME base metals boosted by the weak dollar strengthened overall. Operationally, it is proposed to wait for the news of the dollar to be gradually digested, and find the opportunity to be short when the market returns to the fundamentals. It is recommended to focus on Shanghai aluminum 15000-15300 yuan / tonne pressure bit. Risks point is the policy to cut production, electrolytic aluminum losses led to increased concentration led to reduced aluminum production, cross-market capital flows into the market substantially.