SMM10, 12 March:
After National Day, domestic aluminum fundamentals have changed, especially the increase in supply pressure from the previous "gold, nine and silver 10" demand recovery to the resumption of electrolytic aluminum production capacity under high profits. In particular, the temporary reduction in operating capacity caused by typhoons and equipment failures will all resume in October, and all profits have been made in the middle of the recovery of high funds. After the festival, according to SMM research, downstream October orders were almost flat with September, remained stable, has not yet seen a significant decline, so it is expected to continue to go to the warehouse, there is some support for aluminum prices. Overall, the follow-up aluminum prices still remain weak shock, the center of gravity continues to move down, at the same time at this stage stable consumption will still give the electrolytic aluminum industry a certain profit, short-term can not be overly bearish.
So in this context, what will be the price of recycled aluminum ADC12?
For domestic recycled aluminum ADC12 without futures contract, the most important factor affecting its price is the balance of supply and demand. Under the background of the sharp weakening of demand compared with the same period last year, the built capacity of recycled aluminum is already in a state of surplus, which makes downstream demand become the absolute dominant factor affecting the price of ADC12. In addition, due to the import policy, as well as changes in market sentiment in the supply of recycled aluminum ADC12 prices also have a certain secondary impact.
Specifically, this year's weak car consumption has led to an oversupply of recycled aluminum capacity, recycled aluminum ADC12 prices continue to weaken, ADC12 prices have fallen to a relatively low level. Separately, the price of low-end recycled aluminum is relatively thin and competitive, and the impact of the cost end is relatively greater and more sensitive. On the other hand, high-end recycled aluminum still has room for profit, and the customer base is relatively stable, and the price is relatively more stable, which is more affected by demand. Considering the current poor overall demand, even if the supply of waste aluminum is relatively tight, the price of high-end recycled aluminum is still weak and more stable. On the other hand, the low-end recycled aluminum is more affected by the cost end because the price is close to the cost and the competition is fierce.
According to SMM research, orders for recycled aluminum enterprises in October were relatively stable compared with September, and there was no significant improvement or deterioration. On the one hand, the shortage of waste aluminum supply continued, on the other hand, aluminum prices weakened. Under the comprehensive impact, it is expected that the price of high-end recycled aluminum will remain more stable. On the supply of waste aluminum, first, import waste aluminum approval documents were greatly reduced in the fourth quarter, second, recycled aluminum enterprises due to weak orders from May to August, the current inventory is generally low, the willingness to replenish storage is strong, and third, the opening time of imported aluminum alloy ingot channels is short. It is difficult to make up for the gap in a large number of import sources in the short term, and the shortage of short-term waste aluminum supply will continue. This will have a direct impact on the low-end market prices, the current domestic low-end spot prices have generally risen to more than 13000 yuan / ton. Tight supply of scrap aluminum is expected to continue in October, with low-end ADC12 prices remaining strong and even rising slightly in part as a result of higher scrap aluminium prices.
On the whole, it is expected that the price of recycled aluminum ADC12 in October will be relatively strong, especially the price of low-end goods may even rise to a certain extent, the price range of the whole ADC12 market will be narrowed, and the price gap with A00 aluminum price will also be reduced. After November, due to the increase in the number of imported aluminum alloy ingots, or will have a certain impact on the low-end market, the high-end market may also be affected indirectly, the ADC12 market price range will be opened again. High-end market prices still need to pay attention to downstream demand and changes in aluminum prices.
(SMM Yi Liang)
