Aluminum prices fluctuate around the cost line

Recently, aluminum prices fluctuate around the cost line. And let's analyze the reason of this phenomenon. First of all, on the one hand, the pressure of the Fed's interest rate hike cycle in the fourth quarter still exists, and the overseas supply disturbance of electrolytic aluminum will continue; On the other hand, China's October peak demand season continued to support aluminum price to a certain extent, and aluminum prices will be under pressure again after the peak season. At the beginning of October, the overseas aluminum market showed a significant rebound trend. Looking back at the third quarter, the European market has been intensifying due to the energy crisis, and large aluminum companies have once again reduced production. In some parts of China, due to power shortages, the operating load of aluminum plants has been reduced, and the supply side of electrolytic aluminum has also been significantly compressed. Judging from the consumption performance of the downstream terminal "Golden September and Silver Octomber" peak season, September is obviously insufficient, and the peak season performance in October is expected or not optimistic.

The frequent production cuts of European aluminum companies have also affected the recent aluminum prices. ** In the third quarter, affected by the intensification of the European energy crisis, electrolytic aluminum plants in Europe once again reduced production, and the tight balance between supply and demand of global primary aluminum in the first half of the year was once again broken. In August, Hydro Aluminum's two aluminium plants in Slovakia and Norway planned to cut production capacity by 185,000 tons; in September, Europe's largest aluminum plant, Dunkirk Aluminum, cut production capacity by 22%, and the resumption of production is unclear. According to statistics, the total built electrolytic aluminum production capacity in Europe is about 10.35 million tons, accounting for about 13% of the world, and the production capacity of aluminum plants has been reduced by nearly half in the past year, and the output has dropped to the lowest level since the 1970s.

While in the third quarter of China, the supply side of electrolytic aluminum also showed a significant contraction. From July to August, due to the continuous high temperature weather this year, about 1 million tons of electrolytic aluminum production capacity in China's Sichuan Province was almost stopped, and it has not yet fully recovered. In September, hydropower in Yunnan is close to the dry period, electrolytic aluminum production limit storm resurgence, the current production capacity has been reduced at more than 10%, the overall production reduction is expected to be about 20%, the corresponding production capacity is 1 million - 1.3 million tons, the reduction or continue until next year's water harvest period can be ended. Therefore, at the end of September, China's electrolytic aluminum operating capacity fell back to near 40.4 million tons, and the average daily output of electrolytic aluminum fell to 110,000 tons month-on-month.