Reducing overseas aluminum foils in Europe and boosting Chinese aluminum foil for sale

The reduction of production of aluminum foils by overseas aluminum plants in Europe has boosted market expectations for Chinese aluminum foil companies for sale. And at the end of the year, due to heating demand, European natural gas consumption will be about 3 times that of summer, and in the context of Russia's indefinite suspension of the Nord Stream 1 natural gas pipeline, the high electricity prices under the energy crisis have seriously affected the remaining aluminum plant capacity in Europe to make aluminum foils.

The cost of electricity in Europe has risen alarmingly, with the price of natural gas more than 10 times and the price of coal more than 6 times in just two years. According to the IAI statistics of the average ton of aluminum electricity consumption in Europe in 2021 15146KWh/t, the electricity cost of tons of aluminum foils produced by electrolytic aluminum in the two countries is 6872 US dollars/ton and 6723 US dollars/ton, respectively. As of September 15, LME aluminum was quoted at 2300 US dollars/ton, and Shanghai aluminum foil was reported at 18880 yuan/ton (1 yuan=7 dollars). The cost of electrolytic aluminum photoelectric electricity in France and Germany is nearly 3 times the price of LME aluminum. At present, the cumulative production capacity of European production is about 1.538 million tons, accounting for about 15% of the completed production capacity of electrolytic aluminum in Europe. Looking back at the 2021 European region aluminum smelters due to soaring energy prices, the production cut reached 928,000 tons, and the European electrolytic aluminum production in 2021 was about 7.5 million tons per year, accounting for 12.4% of the total output. As energy prices soar, more aluminum foil smelters will cut production in the fourth quarter of this year.

The energy crisis has not only affected supply, but has also caused continued weakness in demand. At present, the global macro environment sentiment is pessimistic, and the poor performance of demand is currently a commonality of the domestic and foreign markets, so the reduction of production of overseas aluminum plants has brought more impetus from market expectations to Chinese aluminum foil companies at this stage. The overall downstream demand is not good, and the rise in aluminum prices is limited. Although the reduction of production in Sichuan and Chongqing and the shortage of hydropower in Yunnan have made the market worry about the supply side, the domestic new production and resumption of production energy is relatively large, and China's production capacity is still at a high level in previous years from the total amount. European production cuts and high electricity prices will be good for aluminum foil prices for sale, but they will not form a long-term trend.