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Firmly welcome the spring of electrolytic aluminum

Author:Ying Wei AluminiumTime:2017-05-15 10:42:57

  Aluminum plate callback implied market reform of the aluminum supply side is not optimistic

  Over the past month, aluminum supply side reform documents have been issued, but Yunlvgufen, China aluminum aluminum plate prices generally fell 12%~14%, have a certain influence the overall stock market is weak, but the decline in stocks also shows that the market is not too optimistic about the basic aluminum plate as a whole is expected to. There are three reasons for this one-sided pessimism:

  1) at present, Xinjiang and Shandong electrolytic aluminum supply side of the actual movement is lower than expected;

  2) electrolytic aluminum production chain continued to increase and the accumulation of high inventory, aluminum prices have been suppressed;

  3) alumina prices fell rapidly, making cost support weak. We believe that the implementation of the policy need time window, perhaps because the supply side reforms have great anti can promote enterprises to accelerate the recent aluminum production, and alumina prices and prebaked anode prices continued also gave us on aluminum and aluminum plate more reason for optimism.

  There is no reason to be optimistic about the increase in production and the increase in inventories

  According to the information data, the daily output of electrolytic aluminum in China was 9.66, 9.85, 9.91 and 102 thousand and 100 tons in the 1-4 months of this year, with a cumulative increase of about 5.7%. The attitude of the central government to the reform of the supply side of aluminum is basically clear, and why is the output still expanding at a high speed? Reasonable inference or two: 1) to capacity constraints on the enterprise is weak; 2) supply side reform policy window before the end of the enterprise to speed up production. In view of the "coal steel" supply side reform policy than expected implementation, combined with the aluminum industry private enterprises in many industry characteristics, the second inference may be more reasonable. At present, the average cost of the aluminum industry is about 12500 yuan / ton, the cost of new investment capacity will be lower, tons of profits considerable, expansion is excusable. If this logic holds, in view of the information asymmetry in financial markets and their end, the aluminum supply side reforms but should be more optimistic.

  Near the end of the index trading, production capacity locked, the inflection point of supply and demand is not far away

  According to Asian metal net data, capacity replacement index as of May 15th China aluminum can be traded a total of 2 million 475 thousand and 500 tons, of which 2 million 235 thousand and 500 tons of indicators to complete the transaction, the remaining indicators do not mean much capacity limit is locked. According to Aladdin, the end of April the operation of electrolytic aluminum production capacity of 37 million 572 thousand tons, the operation capacity with the compliance index of the production capacity of about 3 million tons, and the estimated policy will affect the illegal production capacity of about 3 million 870 thousand tons, is expected by the end of the electrolytic aluminum effective capacity of about 3700~3900 million tons, taking into account the utilization and environmental impact of 95% capacity. The output of 2017 is expected to be 3470~3650 million tons, compared to the demand side of 3450~3500 million tons, the amount of excess expected -30~150 million tons, compared to a few years ago the excess supply and demand narrowing trend, three, the fourth quarter is expected to see.

  Alumina prices rebounded, the pre baked anode continued to rise, raw material prices will rise as aluminum prices push hands

  According to our estimates, the alumina industry production cost about 2300 yuan / ton, full cost about 2450 yuan / ton, alumina strategic behavior caused by alumina price volatility, wide range, with the aluminum production enterprises shut down, with the upward phase of alumina base. In addition, with the environmental protection pressure caused by the pre baked anode supply and demand continued to be tight, the subsequent electrolytic aluminum production of raw material constraints or increasingly prominent. So whether it is a solid foundation for the supply side or shutting down the cost of raw materials rising aluminum prices have increased, the recommended self-sufficiency of prebaked anode with high degree of Shenhuo shares, Nanshan aluminum, Yunlvgufen aluminum and alumina industry leader China.