Entering April, the contradiction between aluminum supply and demand is not large, the social bank to remove the aluminum price has a certain support, Shanghai aluminum in the macro favorable and news surface pulled, from 20,000 line below the continuous upward, the highest to 21345 yuan/ton, with the market excitement cooling, Shanghai aluminum has fallen. In the near future, the market atmosphere has warmed up, the cost of alumina has risen significantly, and the social storage has accelerated, supporting the strong shock of Shanghai aluminum.
This month, the trend of Shanghai aluminum is greatly affected by macro sentiment, domestic economic data is slightly weak, reflecting that it still takes time to improve short-term demand, but domestic policies to increase stimulus, boost expectations of economic recovery. Overseas, the US CPI for three consecutive months more than expected growth, the market for the Federal Reserve in June interest rate cut expectations significantly cooling, PPI data lower than expected to repair the mood, the US job market is tight, economic data performance is strong, the market for the US soft landing expectations continue to rise. In early April, due to the market trading around the economic recovery, the market euphoria gradually ignored the pressure brought by the cut in interest rate expectations, resulting in a sharp rise in commodity prices represented by gold, crude oil and copper, and also led other non-ferrous metals to follow the continuous upward trend, macro sentiment has a greater impact on the trend of the Shanghai aluminum board.
The United States released two heavy economic data yesterday, the United States GDP growth in the first quarter was lower than expected, the core PCE price index rose 3.7% on an annualized basis, expected 3.4%, the final value of 2.0% in the fourth quarter of last year, the latest data reflect the signs of stagflation in the United States economy, falsifying the logic of overseas economic recovery.
There is a lot of message surface disturbance but the actual effect is limited
The United States and the United Kingdom announced new trading restrictions on Russian aluminum, copper and nickel, the new rules prohibit the London Metal Exchange (LME) and the Chicago Mercantile Exchange (CME) from accepting Russian aluminum, copper and nickel produced on or after April 13, and commodities produced before then are not affected. Because Russian aluminum accounts for a large share of the world, there are also a large number of Russian aluminum ingots delivery in the LME, the market has a short-term risk of tight positions, the news stimulated Lun aluminum sharply stronger, leading Shanghai aluminum to rise slightly. However, from a specific analysis point of view, the news is positive for the short-term trend of aluminum prices, and has a greater impact on overseas, but the medium and long-term impact is relatively limited.
The short-term market has concerns about the follow-up LME aluminum inventory, and the market sentiment has stimulated the enthusiasm of funds to do more, causing the futures price to rise. However, in the medium and long term, since the conflict between Russia and Ukraine, Europe and the United States have repeatedly imposed sanctions on Russian metals, and Russian metal producers have gradually shifted their trade focus to Asia and the Middle East. For Russian aluminum producers, demand and profits have performed well in recent years, and the center of gravity of trade has shifted, so the sanctions or difficult to limit their product sales, Russian aluminum producers are unlikely to reduce production. From the perspective of China's aluminum market, due to the ban on Russian aluminum in Europe and the United States, resulting in more Russian production to the Chinese market, but this has become a fact in 2023, so it is expected to stimulate the new sanctions on the market is actually limited.
The United States and the United Kingdom have calmed down slightly on Russian metal sanctions, and the market has heard the news that the United States has increased tariffs on Chinese aluminum products. Citing "unfair competition," U.S. President Joe Biden on Wednesday called for a two-fold increase in tariffs on Chinese steel and aluminum products, imposing a new 25 percent tariff on some Chinese steel and aluminum products. Meanwhile, the United States will work with Mexico to prevent China from exporting steel and aluminum products to the United States through Mexico to avoid tariffs. By raising tariffs, the United States aims to reduce its dependence on Chinese steel and aluminum products. If the United States raises tariffs, it may affect aluminum exports, but in the long run, the impact of the news may be limited.
Previously, the United States has taken restrictive measures on Chinese aluminum products, which has a significant impact on the economic and trade relations between the two countries, and other countries may consider adjusting their trade strategies, and the increase of tariffs may lead to price fluctuations in the global aluminum market, which will have a certain impact on the global economy. From the specific situation, China's exports of aluminum to the United States only account for about 4.5% of China's total exports, accounting for a limited proportion, coupled with the diversified development of exporting countries, the significant increase in tariffs on China's total aluminum exports or gradually weaken.
The contradiction between supply and demand is not large
In March, the monthly operating capacity of China's electrolytic aluminum enterprises increased, and according to Mysteel research, the operating capacity increased by 165,000 tons/annual capacity in March. In March, the power situation in Yunnan province improved, and the Yunnan provincial government and relevant departments released power loads to support industrial electricity consumption and encouraged local electrolytic aluminum enterprises to resume production in advance. However, due to the drought problem, the progress of production resumption in Yunnan Province was slower than expected. In April, Yunnan's precipitation is more normal, and the province's wind, light and other power supply is better, and the power supply situation continues to improve, electrolytic aluminum enterprises in Yunnan Province actively strive for power load, and increase production capacity on the basis of the original production resumption plan, and supply is expected to continue to increase. However, an electrolytic aluminum plant in Guizhou Province is expected to resume production at the end of April, which is delayed again than the previous plan. Overall, there is still uncertainty about the resumption of production of electrolytic aluminum refineries, and the output of electrolytic aluminum at the supply end is expected to increase slowly.
After entering the seasonal consumption season of Jinsanyin four, the market trading point is mainly the peak season demand to improve the low social pool and the turning point to fall, boosting aluminum prices. From the actual performance point of view, under the boost of the peak season and favorable policies, the downstream demand performance has indeed improved, and the operating rate of aluminum processing enterprises has continued to rise. Although building aluminum profiles have shown a decline since early March, photovoltaic and new energy have performed better, and there is a certain supplement to aluminum demand.
From the released data, the data of real estate investment in March continued to remain low, affected by the slow pace of resumption of investment fell by about 10%, and the new construction and construction area still maintained a year-on-year contraction trend. And the completed area of aluminum, which has been supporting construction, also fell year-on-year. If the completion growth rate continues to slow down, it will have a partial impact on aluminum demand. The automotive sector is still doing well and is still a strong support for aluminum consumption. Data from the China Association of Automobile Manufacturers showed that in March, automobile production and sales were 2.584 million and 2.451 million, respectively, an increase of 27.2% and 24% month-on-month, and an increase of 15.3% and 9.7% year-on-year. In March, the production and sales of new energy vehicles were 863,000 and 883,000, respectively, an increase of 28.1% and 35.3%, and the market share reached 32.8%.
Although the overall price of aluminum in April is in a high state of aluminum products have a certain inhibition, but with the depth of the season process, the market has significantly improved the degree of adaptation to the recent aluminum prices, and aluminum prices have fallen in recent days, coupled with the downstream just need to stock up before the festival, aluminum ingot warehouse continues to decline, according to Mysteel statistics show that as of April 25, Electrolytic aluminum inventories in China's main market were 841,000 tons, down 34,000 tons from Monday's inventory and down 55,000 tons from Thursday's inventory. The social bank is in a low state of decline, which has certain support for the trend of aluminum prices.
Overall, April macro sentiment has a greater impact on the Shanghai aluminum plate, PMI recovery in various countries and the arrival of the commodity inventory cycle more non-ferrous metal prices, funds from precious metals to copper and aluminum to lead and zinc to alumina, in the continuous rotation to make up. From the fundamental point of view, there is no great contradiction between aluminum supply and demand at present, limited supply increase in April, demand performance is good, and social storage began to decline, which has certain support for aluminum price trend. In addition, alumina has risen significantly in recent days, and the strong cost has boosted aluminum prices to a certain extent. Entering May, Yunnan electrolytic aluminum production progress continues to advance, while the traditional consumption season of gold, silver and silver is about to pass, the arrival of the off-season or the demand support gradually weakened, focusing on inventory performance.
(admin YueFeng Aluminium Technology Co., Ltd. www.profiles-aluminum.com; sales@profiles-aluminum.com).
