Aluminum Supply Pressure Increased 2018
“In the first half of this year, about 1.5 million tons of new capacity was put into operation and 545 thousand tons of capacity was put into production. With the resumption of production after the end of the heating season, it is estimated that by the end of June 2018, there will be 40.18 million tons of domestic production capacity. There will be 1.9 million tons of production capacity to be put into production in the six months.” Wu Xiangfeng, director of the metal research department of Huatai Futures Research Institute, said at the meeting that in view of the accumulated inventory of about 1.7 million tons, the overall supply in 2018 Aluminum Profile may be in a state of surplus, and the future will be high. Inventory may be the norm.
“The electrolytic aluminum company was in the break-even stage from the end of November to the end of December last year. With the advancement of supply-side reforms, the industry structure is changing. This time point is in the second half of 2018,” he predicted.
The reporter of the Futures Daily learned that since the beginning of this year, due to restrictions on environmental protection and the Spring Festival holiday, the operating rate of domestic downstream processing companies has declined, resulting in the continuous accumulation of aluminum ingot stocks and continued weakness in the aluminum market. At present, the domestic aluminum price has shown a low oscillation, and the price has remained at around 13,700 yuan/ton, which is the lowest since June 2017.
“Although this year's electrolytic aluminum production will be affected by factors such as supply-side reforms and heating seasons, production will continue to increase,” said Li Xun, senior analyst at Shanghai Steel, according to statistics, China’s electrolytic aluminum production in 2017. It was 36.715 million tons and the built capacity was 47.97 million tons. It is expected that domestic electrolytic aluminum production and production capacity will both increase this year, and production is expected to reach 38.6 million tons, and production capacity will increase to 51 million tons.
“This year's excess supply pressure of electrolytic aluminum will increase once again and may suppress price formation.” Li Xun said that due to increased policy uncertainties, especially with the continuous deepening of supply-side reforms, the “ceiling” of the domestic electrolytic aluminum production capacity will increase. Basically determined, while the expected increase in consumption still exists, the electrolytic aluminum market is optimistic about the medium and long term.
Shanghai Suzuki, a senior analyst at Suzuki, believes that due to factors such as aluminum price fluctuations and capacity expansion, it is expected that processing costs for aluminum rods will be stable or weak. “From a production point of view, this year's national aluminum rod production capacity still has an additional plan of nearly 4 million tons, and is mainly concentrated in Inner Mongolia, Shandong, Xinjiang and Gansu. Overall, Shandong Province is still the largest base for aluminum rod production. ”
On the macro level, Wang Pei, general manager of Hongze Investment Consulting Co., Ltd., said at the meeting that the U.S. economy has a weaker risk, and the U.S. stock price ratio is already very low. “There are bright spots in the U.S. economy, but there are also some worries. In the future, as inflation continues to rise, there will be more and more like a pattern of stagflation. This is the biggest risk point for U.S. stocks.” (Zhang Wenfei)