Analysis on the trend of the hottest future alumin

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Analysis of the future trend of aluminum price -- strong short-term shock and long-term rise are expected

in June, due to the continuous escalation of Sino US trade frictions, the market's expectations of economic downturn increased, non-ferrous metals fell sharply, and aluminum prices gradually fell to around 14000. On July 23, the national Standing Committee proposed that the proactive fiscal policy should be more proactive, the prudent monetary policy should be moderately loose, support the expansion of domestic demand, adjust the structure, and promote the development of the real economy. Superimposed on the rise in alumina prices, aluminum prices rose to 14500. At the beginning of August, due to the indefinite strike of workers in Alcoa's Western Australia alumina plant, the high level of Shanghai aluminum once hit 14885, but then Alcoa said that the replacement of temporary workers would not affect factory production. Shanghai aluminum retook most of the increase, and the aluminum price center rose to 14700

what is the future trend of Shanghai aluminum? We believe that aluminum prices will remain strong in the short term and have strong upward momentum in the long term

Alcoa strike slightly raised the aluminum price center

on August 8, the Australian trade union said that affected by the entry into force of Alcoa's new workplace supervision agreement, Alcoa workers in Western Australia held an indefinite strike. Alcoa is the world's largest producer of bauxite and alumina. In 2017, the output of bauxite and alumina reached 45.8 million tons and 13.1 million tons respectively. At present, Alcoa has three alumina plants in kwinnana, Pinjarra and Wagerup in Western Australia, as well as two bauxite mines in Huntly and Willowdale. The alumina production capacity involved is 8.979 million tons/year, accounting for about 16% of the overseas alumina supply, and the bauxite production capacity is 33.2 million tons/year

however, Alcoa has hired temporary workers at a high price in advance to prevent the strike, so it will not affect the production of the factory for the time being. We believe that although Alcoa workers in Western Australia went on strike in the short term, their production will not be affected temporarily. Therefore, on the whole, Alcoa's strike has only raised the aluminum price center, and the momentum to continue to boost aluminum prices is weak

alumina prices are strong, supporting aluminum prices

domestic bauxite supply is tight, national environmental protection exceeds expectations, and major alumina and electrolytic aluminum producing areas have issued "blue sky defense" plans respectively. Foreign hydro production stoppage events and the latest Alcoa strike have raised alumina prices

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alumina in stock, on August 10, Henan first-class alumina quoted 3010 yuan/ton, the same as last week; The quotation of Shanxi Primary alumina is 3000 yuan/ton, the same as last week; The quotation of Guiyang primary alumina is 2900 yuan/ton, up 30 yuan/ton from last week; The alumina price hovered around the 3000 yuan/ton mark in the week, and the overall increase was small. In addition, alumina port inventory is at a low level and has a downward trend. In addition, with the implementation of more environmental protection production restriction and shutdown policies in the later stage, alumina prices still have room to rise

the demand side of aluminum is in a high-temperature off-season

through the trend of operating rates of aluminum profiles, aluminum plates, strips, foils, aluminum alloys, etc. in previous years, we can see that after entering July and August, due to high temperature and heat, the operating rate will decline, showing the characteristics of the off-season of aluminum consumption. In terms of the operating rate of aluminum profiles, the operating rate of material performance in 2017 fell from 57% in June to a low of 53% in August, a decrease of 4%. The change trend and range of operating rate in 2015 and 2016 are similar. From August 13, 2018, the inventory of electrolytic aluminum consumption places nationwide totaled 1.766 million tons, a decrease of 9000 tons from last Thursday, indicating that the rate of destocking slowed down in the off-season. However, after September, the downstream consumption of aluminum returned to the peak season, which is expected to promote the continued de stocking of aluminum ingots

aluminum exports increased significantly

on the one hand, domestic electrolytic aluminum supply is surplus, electrolytic aluminum inventory is high, and the actual electrolytic aluminum gap abroad is large. On the other hand, during the Fed's interest rate hike cycle, the RMB is in the depreciation channel. All these are conducive to aluminum exports. According to the customs data, the export of unwrought aluminum and aluminum products in July was 519000 tons, up 1.8% tons month on month, with a significant increase of 18% year-on-year. The export volume in a single month hit the second highest level in history. The total export of unwrought aluminum and aluminum products in June was 3.231 million tons, an increase of 13.6% year-on-year, the highest level in the same period over the years. Therefore, we expect that aluminum exports will continue to increase. The increase in China's unwrought aluminum and aluminum exports is conducive to stimulating the domestic aluminum market demand and is the long-term basis for promoting the strengthening of aluminum prices

on the one hand, the Alcoa strike adjusted the level of the experimental machine, raising the aluminum price center. Affected by environmental factors, aluminum oxide prices still have room to rise, thus supporting the strengthening of aluminum prices. On the other hand, aluminum consumption is weak in the current high-temperature off-season, causing a slowdown in the destocking of aluminum ingots. In addition, the strengthening of the US dollar has suppressed aluminum prices, and the room for aluminum prices to rise is limited

to sum up, we believe that the short-term aluminum price will maintain a strong shock trend. In the long run, aluminum exports will continue to grow. At the same time, the peak aluminum consumption season after September will promote the destocking of aluminum ingots. Superimposed on the expectations of environmental protection, production restriction and self provided electricity schemes, aluminum prices have a large upward momentum. Therefore, in terms of long-term operation strategy, it is recommended to go long on bargain hunting

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