The hottest seasonal accumulation suppresses Shang

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Seasonal accumulation suppresses Shanghai aluminum price

under the pressure of many factors, such as lack of policy information, weak consumption seasonality and extensive utilization of high inventories, aluminum prices have maintained a weak adjustment pattern in the near future. With the Spring Festival approaching, under the comprehensive suppression of factors such as further fermentation in the off-season of consumption, seasonal accumulation of inventory, and the expectation of future new production capacity, the total number of patents authorized by various types of countries has reached more than 300 in recent years, and the aluminum price is difficult to improve before the festival

seasonal accumulation of inventory

according to the data, on January 22, the social inventory of consumer areas nationwide increased by 17000 tons to 1743000 tons again, and the overall social inventory remained at a historically high level. Since the implementation of the "2+26+3" environmental protection production restriction plan in the heating season in mid November 2017, the domestic social inventory has not decreased significantly, but only slowed down the inventory accumulation rate. Driven by the policy, the current domestic market is in a weak equilibrium state. With the Spring Festival approaching, downstream processing enterprises have been on holiday since late January. The seasonal off-season of demand will be further reflected, and the cumulative pressure on inventory will gradually appear

comparing the domestic social manufacturing technology level and overall strength in the past few years, we can further improve the inventory trend, and we can find that the seasonal accumulation rule before and after the Spring Festival is significant. From 2015 to 2017, the accumulated inventory of Spring Festival basically started in mid and late January and ended in mid March. The average accumulated inventory reached 600000 tons, of which the accumulated inventory around the Spring Festival in 2016 was Zui less, but there were also nearly 360000 tons. Considering the current domestic daily inventory of more than 1.7 million tons, further accumulation, which can both harden and replace the metallographic microscope, will significantly suppress the short-term price. It is expected that by the middle of March, the domestic social inventory will be at a record high of 2.1-2.3 million tons

production capacity continues to be put into production

according to research, the domestic electrolytic aluminum plan to increase production capacity by about 3.13 million tons in 2018, which is mainly concentrated in Xinjiang, Inner Mongolia, Shanxi, Guizhou and Guangxi, and the new production capacity is expected to remain large during the year. Recently, with the alumina price falling below the 3000 yuan/ton mark, the average production cost of the electrolytic aluminum industry has fallen to the range of 14000-15000 yuan/ton. Except for high-cost areas such as Henan, most domestic electrolytic aluminum enterprises have begun to turn losses into profits, and the production capacity of a considerable scale has been ready for production. According to Aladdin's research, it is expected that China will put into production 1.402 million tons of electrolytic aluminum in the first quarter of 2018, and the operating rate of the electrolytic aluminum industry will hit the bottom in the later period. The launch of new capacity is expected to further increase the pressure on inventory accumulation in the first quarter, thus directly suppressing aluminum prices

the short-term decline does not change

the supply side reform of electrolytic aluminum industry will continue to affect the development of the industry and the performance of domestic aluminum prices. In addition, on January 19, the Ministry of Environmental Protection announced that China will implement special emission values of air pollutants in Beijing Tianjin Hebei air pollution transmission channel cities ("2+26" cities) from October 1, 2018, and environmental protection production restrictions will continue to be implemented in the heating season. The "combination sword" of supply side reform and environmental protection policies will gradually improve the supply and demand fundamentals of the domestic electrolytic aluminum industry in the medium and long term. However, in the short term, aluminum prices remain weak due to the lack of other policy incentives

to sum up, the game between stronger policy expectations and weaker fundamentals will continue to affect domestic aluminum prices. With the seasonal accumulation of daily inventory and the expectation of new production capacity, aluminum prices will continue to be under pressure before the Spring Festival

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