After the Spring Festival so far, Shanghai aluminum main force rose 3.66%, the continuation of the oscillation upward trend; LUN aluminum rose 19.33%, the momentum is fierce. LUN aluminum rose mainly by energy prices, Western Europe production cut storm, Russian aluminum export restrictions on these three factors.
The situation in Russia and Ukraine continues to escalate, leading to the European energy prices rose sharply, raising the cost of electrolytic aluminum. Western Europe’s existing 3.3 million tons of electrolytic aluminum production capacity has been 50% of the announced production cuts, accounting for about 2.2% of global production. In addition, Russia is the world’s second largest primary aluminum production area after China, with an annual output of about 4 million tons, accounting for 5.95% of global primary aluminum production, and about 86% of electrolytic aluminum exports in 2021, accounting for 12% of global aluminum export trade. Affected by the exclusion of some Russian banks from the Society for Worldwide Interbank Financial Communications (SWIFT) payment system, Rusal, as the only Russian electrolytic aluminum enterprise, has difficulties in exporting its products. If the situation in Russia and Ukraine intensifies, the energy crisis under the European production reduction action or further expansion, the Russian aluminum exports continue to be restricted, favorable to LUNO.
Shanghai aluminum with the lack of power is mainly compared to the Lun aluminum, the current supply and demand contradiction is not prominent enough. On the one hand, the domestic energy prices are relatively stable, and no speculation subject, and aluminum plant in high profits to promote the speed of production; on the other hand, the real estate side of the demand is weak in the short term, because of the shortage of funds, construction sites to resume work time delayed about half a month, the rest of the terminal industry to resume work and production process is also relatively slow, the lack of strong support for aluminum consumption growth.
And the aluminum revelry, Shanghai aluminum slightly hesitant this phenomenon directly caused two results: one is the Shanghai aluminum, the aluminum ratio all the way weaker, 2021 quarter so far, the import window has been closed for more than 4 months, the lack of imported aluminum ingots, the supply side is limited; two is the Shanghai aluminum, the aluminum ratio is at the lowest level in nearly 3 years, export profits increased significantly, export profit window open, the enterprise export willingness to enhance. In addition, the current domestic demand is relatively weak, and domestic and foreign aluminum ingot prices are obviously inverted, overseas orders will be stronger, driving domestic consumption growth.
As China needs to charge 15% tariff for aluminum ingot export, but enjoys 13% full tax rebate for exporting aluminum processed products, so the downstream products become a popular choice for export. About 80% of aluminum sheet and strip, aluminum foil, aluminum profiles and other products are exported to Japan, South Korea and other Asian countries. At present, the domestic processing fees of aluminum sheet and strip, aluminum foil, aluminum profiles and other processed products are 3,600 yuan/ton, 6,000 yuan/ton, 8,000 yuan/ton, and it is known that the three corresponding export profits are 6,900 yuan/ton, 6,800 yuan/ton, 5,800 yuan/ton. In the aluminum sheet and strip export profit exceeds the background of domestic processing fees, the domestic aluminum sheet and coil processing enterprises export willingness is obviously enhanced.
In addition to the export of semi-finished products for overseas aluminum processing enterprises to continue processing, the recent also have large domestic aluminum plate and strip enterprises export aluminum content of 99.7% of the cast rolled coil (a kind of aluminum plate and strip), as remelting aluminum ingot use, to a certain extent to promote the domestic consumption. As the cast rolled coil for remelting with lower quality requirements, processing fees are also relatively cheaper, for aluminum strip enterprises, pay cheaper processing fees and export to obtain tax rebates is a more cost-effective choice. If LUN aluminum remains strong, aluminum foil and aluminum export profitability is expected to continue to improve, to promote more aluminum processing products exports.
According to the latest data from the General Administration of Customs, from January to February, China exported 1.034 million tons of unwrought aluminum and aluminum, up 22.8% year-on-year, hitting a record high. Due to the unrest in Russia and Ukraine led to a sharp rise in energy prices, the supply side of the supply shortage accompanied by overseas market demand, overseas enterprises will turn their attention to China, the world’s largest electrolytic aluminum producer, overseas customers to ask for a single price is more positive. Coupled with China’s tax rebate subsidies for aluminum, some domestic processing enterprises even during the Spring Festival without stopping production to increase the export volume. In overseas enterprises before the Spring Festival, lock single and stockpile larger, plus the high price of aluminum downward conduction also need to lag a period of time, this export volume is already very pleasing. With overseas demand recovery, March-April overseas export orders ushered in explosive growth or can be expected, along with the domestic downstream consumption terminal industry into the “gold three silver four” traditional consumption season, domestic consumption to good.
In a word, at this stage, Shanghai aluminum, the aluminum ratio all the way weak, resulting in downstream such as aluminum plate and coil aluminum processing products such as export profits increased significantly, significantly more than the domestic processing fees. At present, mainly rely on the export of aluminum to support the Shanghai aluminum price, and close to 7000 yuan / ton of high profits will inevitably trigger the export arbitrage, the rapid decline of Shanghai aluminum, Lun aluminum ratio is expected to return. Therefore, although the domestic aluminum price performance is more hesitant, but the aluminum price global synchronous operation is the general trend.
Post time: Mar-11-2022