Aluminum prices may fluctuate with the cost of electrolytic aluminum in the short term

In terms of alumina, overseas prices will have a certain impact
on China.
As of October 9, SMM Australian alumina FOB price was 600 US dollars / ton, at a nearly 4-year high, the price is equivalent to 4137.
42 yuan / ton, while the average price of SMM alumina is 3227 yuan / ton, but lower than the same period last year 3602 yuan / ton
.
From the perspective of domestic and foreign prices, the current overseas alumina price is still higher than the domestic alumina price, which is conducive to China's alumina exports
.
However, it is understood that on October 9, Hydro, a major overseas alumina manufacturer, will restore 50% of its production capacity within two weeks, and workers at Alcoa's Western Australia branch have ended their strike
.
From the perspective of overseas supply and demand pattern, alumina supply is still tight, but the degree of supply tension may be difficult to further aggravate, and the boost to China's alumina price is limited
.

From the perspective of alumina, the main raw material of electrolytic aluminum, due to strict environmental protection inspections this year, the supply of domestic bauxite is restricted, resulting in bauxite prices at a high level, and domestic alumina prices have also been pushed up
.
As of October 8, the average price of bauxite in Shanxi was 485 yuan / ton, which was at a high level
in nearly four years.
From the supply side, Shanxi Province Luliang City alumina enterprises limited or loosened, alumina supply tension is reduced, but still need to pay attention to the supply of natural gas, if the winter northern natural gas supply is insufficient, do not rule out alumina prices like last winter, due to the tight supply of natural gas and rise
.

From the perspective of other raw material prices, as of October 8, the average price of SMM pre-baked anode was 3823.
75 yuan / ton, lower than 4389.
38 yuan / ton in the same period last year, because this year's heating season production limit is lower than last year, pre-baked anode price is also lower than last year
.
Since alumina and pre-baked anodes account for 34% and 15% of the production cost of electrolytic aluminum respectively, and pre-baked anodes account for only 2% of the cost of electrolytic aluminum, if the price of alumina and prebaked anode does not rise significantly, the cost of electrolytic aluminum is difficult to be too high, and the aluminum price is difficult to have sufficient upward momentum
.

This year, the electrolytic aluminum industry is in a state of loss for most of the time, resulting in many electrolytic aluminum companies are not willing to expand, and the output of electrolytic aluminum is less
than last year.
Since December last year, the ratio of Hulun aluminum has been at a historical low, which has stimulated the export of aluminum profiles in China, but domestic inventories are still at the high level of the same period in the past three years, which will also cause resistance
to the rise in aluminum prices.
As of October 8, the last period of aluminum inventory was 652,870 tons, although it was down 25.
78% from the peak of 879587 tons in April this year, but still an increase of 26.
3%
from the 516817 tons in the same period last year.
On the whole, the domestic supply of electrolytic aluminum is still sufficient
.

To sum up, although it is currently the traditional consumption season of "Golden Nine Silver Ten", aluminum market demand may pick up, but because this year's heating season production restriction is not as strong as last year, and aluminum market inventory is high, if there is no policy favorable or news stimulation, aluminum prices short-term or with the cost of electrolytic aluminum fluctuations, the operating range is 14300-15000 yuan / ton, it is recommended to pay attention to the impact of changes in the price of alumina and pre-baked anodes on the cost of
electrolytic aluminum.