With the development of the Russia-Ukraine conflict, yesterday LUN aluminum went all the way up to refresh the record of the historical extreme, Shanghai aluminum also once pulled up. But with the relevant information shows that the energy and aluminum products in Russia or may bypass the sanctions after the news outflow, LUNO and Shanghai aluminum in the night trading are showing the high retracement trend, but the international aluminum prices are still maintained at a high level, in the background of aluminum prices continue to rise, the domestic aluminum market what kind of changes have occurred
Russia is the largest producer of electrolytic aluminum outside of China, with Russian electrolytic aluminum production reaching 3.76 million tons in 2021, accounting for more than 5% of global production. Traders have said that with the escalation of the situation in Russia and Ukraine, it is difficult to see the top of aluminum prices in the short term. At the same time, the supply of electrolytic aluminum is similarly constrained in terms of overseas energy costs. Russia and Ukraine after the escalation of the conflict, crude oil, natural gas prices into a new round of upward channel, and all reached a record high, electrolytic aluminum in the context of rising energy costs, the price cost pressure is still greater.
It is worth noting that, as one of the main energy supply countries in Europe, Russia has cut off the supply of natural gas transmission to Europe, resulting in European aluminum smelters have cut production. Analysts believe that the significant reduction of smelting imported aluminum will affect the domestic supply and demand situation.
SMM big data director Liu Xiaolei said in an interview, the current domestic single-month imports due to the lack of exports appeared at least 100,000 tons of supply gap, this part of the shortage will need to rely on domestic production capacity to supplement, but in the short term, the resumption cycle is slow, so the domestic supply and demand contradictions will also increase.
Earlier today, news said that because the market is trying to cope with the already serious aluminum shortage, Biden team to postpone the sanctions against Russia and may impact the aluminum supply. Under the influence of this news, today’s aluminum, Shanghai aluminum both downward, as of the end of the day, aluminum closed down 0.85%, Shanghai aluminum closed down 1.44%.
In the spot market, today’s A00 aluminum spot offer 22820 yuan / ton, compared with yesterday rose 120 yuan / ton. The domestic morning discount narrowed slightly. Although the downstream is still in a wait-and-see mood, the domestic accumulation has shown signs of weakening, and some intermediaries are reprimanded to enter the procurement. The morning spot discount to East China is RMB 50/mt, narrowing by RMB 10/mt compared to yesterday. Centaline (Gongyi) prices to East China discount 160-170 yuan / ton, to the plate discount 210-220 yuan / ton concentration.
In addition, it is worth noting that domestic aluminum ingot inventory weekly accumulation of 60,000 tons to 1,099,000 tons on February 24, the accumulation rate has slowed down. Domestic aluminum bar inventory decreased by 0.4 million tons to 260,600 tons compared with last Thursday. Meanwhile, according to SMM statistics, the opening rate of leading domestic aluminum processing enterprises this week is 68.1%, an increase of 1.6 percentage points from last week.
In summary, on the supply side, the outbreak of the war between Russia and Ukraine, energy and electrolytic aluminum supply shortage is expected to strengthen. On the demand side, the rate of accumulation has slowed down. Aluminum processing enterprises gradually resume production. Overseas supply risk intensified superimposed on domestic consumption support, short-term aluminum prices are expected to maintain a high level.
Post time: Feb-26-2022