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After the Spring Festival, Shanghai aluminum followed the rise in market sentiment, and the trading logic of bulls mainly focused on macro benefits such as inflation expectations
.
Since Wednesday this week, Shanghai aluminum has soared and broken through the previous high, which is more of a return to its own fundamental logic
.
Due to the overall energy consumption in Inner Mongolia in 2020 is not up to standard, the market rumors that the electrolytic aluminum plant in Mengdong will reduce production in the form of maintenance, and at present, Mengdong mainly has a total of 2.
6 million tons of electrolytic aluminum production capacity of Jinlian, Huocoal Hongjun and Chuangyuan, and the specific reduction volume is not clear
.
More importantly, in 2021, Inner Mongolia originally planned to put into operation about 600,000 tons of new electrolytic aluminum production capacity, after the problem of regional energy consumption exceeding the standard, the market doubted whether the new production could be implemented as scheduled, and the supply margin of electrolytic aluminum may change during the year, which played an explosive role in the current market sentiment, causing aluminum prices to break through the previous high
.
After a long overcapacity cycle, the supply-side reform in 2017 gradually cleared the backward production capacity of electrolytic aluminum, and the ceiling of electrolytic aluminum compliance capacity was determined to be around 44 million tons, and the current operating capacity has reached nearly 40 million tons, and the long-term supply growth rate is limited
.
In the context of carbon neutrality, aluminum, as an important material for lightweight replacement, has great potential in the field of new energy, not to mention the fiscal stimulus waiting to be launched in the United States and the blessing of the Democratic
government's preference for new energy.
From the perspective of the big cycle, the matching of supply and demand in the aluminum market has begun to reverse
.
During the year, the Fed's emphasis on loose monetary policy will not change in the short term, the Biden administration's $1.
9 trillion fiscal stimulus is about to land, the US real estate industry maintains a high prosperity, manufacturing replenishment is still underway, external demand is expected to become an important highlight of aluminum consumption growth during the year, and the sluggish aluminum exports in 2020 are expected to be boosted
.
Domestically, the accumulation of electrolytic aluminum after the Spring Festival is moderate, and the total inventory of aluminum ingots of slightly more than 1 million tons is at an absolute low level in recent years, forming an effective support
for prices.
The market expects that the in-place New Year will trigger the resumption of work after the holiday and the pre-consumption of consumption, which will further weaken the accumulation range
.
From the post-holiday survey, profiles, die-casting alloys and other processing industries generally shortened the holiday, although the high aluminum price inhibited some procurement demand, but in the context of the upcoming start of the consumption season, the recovery of real demand is expected to be reflected soon in spot and inventory
.
In terms of domestic supply, the new production capacity in the first quarter was mainly concentrated in Yunnan, with a total of less than 300,000 tons, and the short-term supply release pressure was not large, and the energy consumption problem in Inner Mongolia may cause a butterfly effect, further reducing the supply increment
during the year.
During the year, the fundamentals of electrolytic aluminum were solid, supporting the upward price trend
.
After Shanghai aluminum broke through the high point of supply-side reform, the upside opened up, and the contradictions that need to be paid attention to in the future market mainly focus on the actual impact of energy consumption restrictions in Inner Mongolia on the existing production capacity and new production capacity of electrolytic aluminum, as well as the effective transmission
of US fiscal stimulus to demand.
Overall, the fundamentals of electrolytic aluminum are solid, the supply and demand matching cycle may be reversed, aluminum may become the variety with the largest expected difference in the colored sector, and the high point of Shanghai aluminum is expected to be raised to 19,000 yuan / ton during the year, and it is recommended to trade with long ideas
.
