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A sudden change in the situation in Russia and Ukraine Lun Aluminum hits an all-time high and worries about the pull-up supply of Shanghai aluminum may continue to support aluminum prices [SMM analysis]
Feb 24, 2022 15:50CST
Source:SMM

At noon on February 24, 2022, Russia officially launched military action against Ukraine, which triggered market concerns about aluminum supply. Aluminum rose sharply in both internal and external trading, and Shanghai Aluminum rose in a straight line in the afternoon trading, rising more than 1% at one point. Wupanlun aluminum continued to rise more than 2% today, during which it stood at $3388, the highest level since 2008.

"Click to see the trend of aluminum futures.

Domestic spot, today's SMMA00 aluminum quotation is the same as yesterday, at 22700 yuan / ton. Early trading purchasing sentiment from weak to strong, procurement activity rebounded, although there is still a wait-and-see downstream, but the strength of the middleman to receive goods, the spot discount narrowed to the discount of 60 yuan / ton that month.

"Click to view the spot quotation of SMM aluminum

According to reports, after Russia launched military action against Ukraine, the Group of Seven and the United States said they would impose severe sanctions on Russia. At the same time, the further deterioration of the energy crisis in Europe has further deepened the pattern of tight global aluminum supply.

SMM believes that the situation in Russia and Ukraine is abrupt, a large number of enterprises have reduced production as a result of rising overseas energy costs, and the domestic impact of the Baise epidemic in Guangxi has not yet recovered, and aluminum prices will remain relatively strong in the short term.

In addition, it should be noted that although domestic inventories are still increasing this week, social aluminum ingot stocks have rebounded to around 1.1 million tons, but the extent of accumulation has slowed down, and the scale of depots has rebounded, and it is expected that the depots will be cashed in the week after next.

Institutional point of view:

Guotai Junan Futures: escalation of conflict between Russia and Ukraine: reappearance of "Russian Aluminum shock Wave" in 2018

Whether it is the limited trade flow of Russian aluminum supplies, the cancellation of the registration of Russian aluminum brand by LME, or the further deterioration of the European energy crisis, all these point to a point, that is, the global aluminum supply problem. In the current aluminum market, it is difficult to quickly increase domestic supply in the short term, while the pattern of overseas shortage continues, various factors lead to tight global aluminum supply in the short term, and if the United States imposes sanctions on Russian aluminum, it will further deepen the tight pattern of global aluminum supply and form effective support and upward drive for aluminum prices.

"View details: escalation of conflict between Russia and Ukraine" reappearance of "Russian Aluminum shock Wave" in 2018 [Agency Review]

Shenyin Wanguo Futures: the situation in Russia and Ukraine has changed and is good for nickel, aluminum, palladium, platinum, etc.

The change in Russia and Ukraine leads to the supply risk of non-ferrous commodities, which is good for nickel, aluminum, palladium, platinum, magnesium and so on. Russia is the world's leading exporter of aluminum, nickel, palladium and platinum. Russia's exports of aluminum, nickel, palladium and platinum account for 12 per cent, 7 per cent, 26 per cent and 4 per cent of global export trade respectively. European exports of aluminum, nickel, palladium and platinum account for 16 per cent, 42 per cent, 45 per cent and 36 per cent of global exports to Europe, respectively, and magnesium ingots account for about 8 per cent of global output. The change in the situation in Russia and Ukraine may have a certain impact on the global supply of aluminum, nickel, palladium, platinum and other non-ferrous metals, and is expected to push up the prices of related products.

"check details: the situation in Russia and Ukraine has changed to benefit nickel, aluminum, palladium, platinum, etc. [institutional review]

Analysis of the situation in Russia and Ukraine
Lun Aluminum
Shanghai Aluminum
Aluminum prices

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