LME aluminium inventories fell sharply for the first time in a decade

In terms of the industry, according to news, the strike of Alcoa Australian aluminum project continued
.
Union workers at two alumina plants and three bauxite mines went on strike on August 8, fearing no job security
under the new agreement.
The timing of the strike was also more sensitive, coinciding with a very tight
supply of alumina.
Affected by this, aluminum prices rose by 20%
in one month.
Alcoa's union for the Western Australian aluminium project said it would meet with management to find a solution to the strike that lasted more than six weeks
.
Last week, Alcoa adjusted its salary proposal
.

Industry insiders said that the incremental space for electrolytic aluminum supply is relatively clear, and the new production capacity that can be added in the industry at present only comes from the replacement of eliminated production capacity, special production capacity in Yunnan and Guangzhou, and compliance capacity replacement
.
It is expected that the total compliance capacity of the industry in the next 4-5 years will be 47.
02 million tons, but the upper limit of operating capacity is about
44 million tons.
Approaching the deadline for the replacement of obsolete capacity at the end of 2018, the replacement trend has accelerated, but the actual new production is slow
.
Inner Mongolia and Guangxi new production capacity concentration areas are limited by external factors such as strict self-provided power policies and tight upstream ore resources, and it is expected that the future supply growth rate will remain low, and it is expected that the national electrolytic aluminum production in 2018-2019 will be 36.
30 and 38.
4 million tons respectively.

In terms of the cost of electrolytic aluminum, industry insiders said that the landing of cross-fertilization subsidies for Shandong captive power plants may play a demonstration role, and the national captive power plant governance will significantly increase the production cost of aluminum enterprises and form a strong support
for aluminum prices.
Only considering the cross-subsidy of Shandong Province this year and next year, the average cost of electrolytic aluminum enterprises in the country can increase by nearly 170 yuan / ton
.

On the demand side, grid investment in the power sector is expected to accelerate in the second half of the year, and aluminum consumption in this sector may bottom out, while the expected strengthening of infrastructure investment is also expected to improve the marginal demand in related fields
.
Huatai Securities expects that the growth rate of aluminum consumption will rebound to 3.
9% in 2018, and inventories are still expected to continue to decline
.
In 2019, supply and demand may be stronger than in 2018, and aluminum social inventory is expected to enter the range of 135-1.
45 million tons, and the value of sector allocation will gradually increase
.

Analysts said that the heating season production restriction will be advanced to early October, and carbon companies are ready to limit production in October, so the probability of preparing anode pricing in October will continue to rise, and industry insiders feedback or increase by about
200 yuan / ton.
In the future, investment opportunities in the electrolytic aluminum industry chain will focus on two main lines: first, overseas attention to the Alcoa strike and Rusal sanctions are still or are expected to ferment; The second is the expected reduction in the supply of the electrolytic aluminum industry chain brought about by the domestic heating season and the limited production season, as well as the progress
of self-owned power plant rectification.