With the development of the conflict between Russia and Ukraine, Lun Aluminum went all the way up yesterday to set a new record of historical extremes, and Shanghai Aluminum also once pulled up. However, with the release of relevant information that energy and aluminum products in Russia may circumvent sanctions, Lun Aluminum and Shanghai Aluminum both showed a high withdrawal trend in the night market, but international aluminum prices remained high, against the background of rising aluminum prices. what is the impact on the domestic aluminum trade market? SMM spoke to CCTV on this topic.
Russia is the largest producer of electrolytic aluminum after China, producing 3.76 million tons of electrolytic aluminum in 2021, accounting for more than 5 per cent of global production. Traders have said that with the escalation of the situation in Russia and Ukraine, it is difficult to see aluminum prices peak in the short term. At the same time, overseas energy costs also restrict the supply of electrolytic aluminum. After the escalation of the conflict between Russia and Ukraine, the prices of crude oil and natural gas have entered a new round of rising channels, and both have reached record highs. Under the background of rising energy costs of electrolytic aluminum, the upward pressure on price costs is still greater.
It is worth noting that Russia, as one of the major energy suppliers in Europe, has cut off the supply of natural gas in Europe, leading to production cuts in European aluminum smelters one after another. Analysts believe that the sharp reduction in aluminum imports from smelter will affect domestic supply and demand.
Liu Xiaolei, director of SMM big data, said in an interview that at present, domestic monthly imports have a supply gap of at least 100000 tons due to lack of exports, and this part of the shortage needs to rely on domestic production capacity to supplement, but in the short term, the resumption cycle is slow, so the contradiction between domestic supply and demand will also increase.
Earlier today, it emerged that the Biden team had postponed sanctions against Russia that could hit aluminum supplies as the market struggled to deal with already severe aluminium shortages. Under the influence of this news, Lun Aluminum and Shanghai Aluminum both fell today. By the end of the day, Lun Aluminum closed down 0.85% and Shanghai Aluminum closed down 1.44%.
"Click to view the trend of metal futures market.
Spot market, today's SMMA00 aluminum spot quotation of 22820 yuan / ton, compared with yesterday's increase of 120 yuan / ton. Domestic morning discount narrowed slightly, although the downstream wait-and-see mood still exists, but the domestic accumulation has shown signs of weakening, some middlemen invested to enter the purchase, the morning spot discount in East China 50 yuan / ton, 10 yuan / ton narrower than yesterday. The price of Central Plains (Gongyi) is 160-170 yuan / ton for East China and 210-220 yuan / ton for disk.
"Click to view the spot market of SMM aluminum.
In addition, it is worth noting that, according to SMM statistics, the weekly stock of aluminum ingots in China accumulated 60, 000 tons to 1.099 million tons on February 24, and the accumulation rate slowed down. Domestic aluminum rod inventory decreased by 4000 tons to 260600 tons compared with last Thursday. At the same time, according to SMM statistics, the operating rate of domestic leading aluminum processing enterprises this week was 68.1%, an increase of 1.6% from the previous month.
"Click to view SMM aluminum electrolysis inventory data
To sum up, SMM analysis believes that on the supply side, the war between Russia and Ukraine broke out, and the shortage of energy and electrolytic aluminum supply is expected to strengthen. The speed of demand-side accumulation has slowed down. Aluminum processing enterprises gradually resume production. The risk of overseas supply aggravates the superposition of domestic consumption support, and aluminum prices are expected to remain high in the short term.
