The hottest supply and demand is weak, inventory i

Supply and demand are weak, inventory should not be too optimistic in the light and peak seasons. In July 2018, the national electrolytic aluminum production capacity was 37.51 million tons, a year-on-year decrease of 1.8%; The operating rate in July was 75.9%, compared with 81.5% in the same period last year; The output from January to July was 21.2 million tons, down 2.4% year on year. This survey involves Shandong electrolytic aluminum enterprises with a total capacity of 9.066 million tons, all of which are at full capacity

the electricity price in Shandong has a strong competitive advantage across the country. At the same time, it is close to the port, so it can use relatively cheap foreign mines to produce alumina. At the same time, alumina can be completely self-sufficient, so it has a competitive advantage on the cost side. The total average cost of electrolytic aluminum in Shandong Province is about 13500 yuan - 13800 yuan/ton, and the profit per ton of aluminum is nearly 1000 yuan/ton

demand side: the demand for civil materials is poor, and the industrial materials and exports are good

from the sales of aluminum water and ordinary aluminum rods, the consumption is relatively light in the off-season at present, which is mainly reflected in the relatively low processing cost of aluminum rods. During the research period, 6063（ Φ 90mm) aluminum rod processing fee is 425 yuan/ton, which is lower than the peak of 470 yuan/ton in May. In addition, some enterprises sell molten aluminum ingots, which also reflects the general sales of aluminum rods. However, for aluminum ingots, enterprise shipments are relatively stable, and the impact of the off-season is only price rather than quantity. The sales of aluminum rods and ingots in Shandong can basically reflect the current situation in the country. At present, the processing fees of aluminum rods in domestic mainstream consumption places are significantly lower than the peak in May. However, it needs to be added that the reasons for the decline of aluminum rod processing fees may be relatively complex. The author's analysis may include the following points: first, at present, more and more aluminum rod manufacturing enterprises tend to directly connect with terminal enterprises for sales, bypassing traders, which directly reduces the liquidity of goods sources; Second, the price of aluminum rose in late August. For traders, the basic price includes more profits, so they are willing to give up part of the processing fee

for the consumption of aluminum products, it shows a certain differentiation. For civil aluminum materials, generally light alloys, including aluminum plates, strips and foils, the current sales situation is relatively general. The sales of aluminum rods are relatively good, mainly due to the relatively sufficient orders in China at present, and the shortage of aluminum water supply this year has led to a certain demand in the aluminum rod industry according to the composite polyurethane A-level plates with double-sided mortar coating provided by some manufacturers and the test reports. In terms of industrial materials, the current overall sales situation, including future orders, are relatively good. The main reason is that there are not many enterprises with deep processing capacity at present, and the industry competition is small. In addition, the sales of both civil and industrial profiles involving export business are good, which is consistent with the aluminum exports announced by the National Bureau of statistics

inventory: the transition from light season to peak season is imminent, and there is no downstream preparation in advance.

this round of aluminum price trend can be defined as the cost promotion under the bear market. Whether the price of electrolytic aluminum can rise depends on whether the rising cost can be smoothly transferred to the downstream processing enterprises. Due to the very high start-up and shutdown costs of electrolytic cells, that is, the supply of electrolytic aluminum is seriously inelastic. At the same time, under the general background of domestic capital shortage, enterprises are eager to speed up the turnover and liquidation. In this case, the bargaining power of electrolytic aluminum enterprises to downstream processing enterprises is not at a strong low level. However, when the price rises, the willingness of the downstream to take goods will be significantly reduced, but as long as it is not time for serious losses, in order to retain customers, the downstream will still purchase according to rigid needs. Inventory is an important weight in the bargaining of all links of the industrial chain

aluminum ingot and aluminum rod inventory: among the enterprises surveyed in this survey, aluminum ingot and aluminum rod manufacturers are determined to measure deformation; There is almost no inventory, and the inventory is mostly concentrated in the hands of traders. Downstream enterprises have not prepared goods in advance in the off-season of summer at present. In the case of low downstream inventory, due to the existence of rigid demand (especially the demand will improve to a certain extent in September and October), the downstream has a certain tolerance for the rise of aluminum price. From this point of view, it is reasonable to maintain the aluminum price at the full cost line of about 200 yuan. However, another problem is that if the total price of aluminum exceeds 15500 yuan/ton and approaches the 16000 yuan/ton mark, the social inventory of 1.6 million tons of aluminum ingots will begin to accelerate into the market, which will greatly inhibit the price

downstream inventory: according to the feedback of the surveyed enterprises, the downstream processing enterprises have not purchased in advance in the off-season, and have been purchasing on demand in July and August. It can be inferred that with the rise of electrolytic aluminum prices, the downstream has limited time to wait and see, and the existence of rigid demand makes downstream enterprises have a higher tolerance for the rise of aluminum prices

investment suggestions

the following factors are mainly considered for the future trend of aluminum price:

price ratio of aluminum ingot to alumina: as of August 28, the price ratio of aluminum ingot to alumina was 4.43, lower than the average value of 5.45 in recent five years. It means that the current price of electrolytic aluminum is not overestimated from the perspective of cost (especially considering the rise of power cost). Therefore, as long as the price comparison is at a reasonable level, the rise in aluminum prices will be supported by costs

downstream peak season rigid demand: Although the current aluminum industry "peak season is not strong, off-season is not weak" is a trend, but after September, the demand will still improve to a certain extent on the margin. In addition, at present, the downstream has not been prepared in advance. Therefore, due to the existence of rigid demand, the downstream demand will not deteriorate significantly in the process of rising aluminum prices

expectation of heating season: from the experience of last year, the heating season is a double-edged sword, and the demand will be significantly affected while the supply is compressed. The impact on the supply side this year mainly lies in the tight ore supply caused by bauxite regulation, and the addition of Fenwei plain may lead to a certain exceeding expectation in alumina production restriction. The weakening of the heating season on the demand side this year can not be ignored, especially in the context of stricter environmental requirements. Generally speaking, the heating season is relatively more, but it should not be blindly optimistic

trade war high inventory: at present, the trade war will probably be a protracted war, and each mutual tariff will put a full pressure on base metals. And the aluminum ingot inventory far exceeds that of the same period in history, which will also cause pressure in the rise of aluminum price. Today, we introduce the use and operation points of high-frequency fatigue testing machine. These two will seriously compress the elastic space of aluminum price this year

on the whole, whether it is the logic of cost promotion, fundamental repair, or the heating season policy, there is still a certain room for aluminum prices to rise. The trend of aluminum price this year will be from top to bottom. The dual effect of trade war and high inventory will compress the elasticity of aluminum price