Aluminum supply and demand change, aluminum prices come to a turning point

"CNBC" reported on August 10th that the resource analyzator of the Intelligent Investor, GauravSodhi, believes that after the sharp cuts in production by mainland manufacturers and the readjustment of the supply and demand of the overall aluminum industry, the aluminum market, which has been empty, will also come to a turning point. After the London Metal Exchange (LME) hit a low of US$1,677 per ton in February this year, it has risen by 20% cumulatively, and it has seen bullish market signals in the market. The recent price also held steady at more than US$2,000 per ton. 17-month high.

The Indian broker EmkayGlobalFinancialServices Ltd. reports that the prices of aluminum and zinc are expected to remain at current levels, saying that LME aluminum and zinc stocks are basically flat in the near future. Sodhi pointed out that the continuous growth of aluminum production in the mainland in the past few years has been an important factor in suppressing aluminum prices, but this situation has changed since the end of last year, the mainland has cumulatively cut 2 million tons of aluminum production capacity.

On the other hand, producers outside the mainland continued to cut production, and aluminum production fell by 2% in the first quarter of the year for the largest aluminium producer in the world, Rusal Aluminum (0486.HK). JPMorgan estimates that there will be a shortage of 439,000 tons in the aluminum market this year, reversing the market condition of over 2 million tons during the financial crisis, and the Reuters survey estimates that the aluminum market will have a surplus of 444,000 tons this year.

Dominic Schneider, Head of Commodities Research at UBS, believes that most of the gains in aluminum prices have come to an end. They say that they should not only pay attention to LME aluminum prices, but also must pay attention to the premium of aluminum. With premiums, aluminum prices are already about every T. 2,400 US dollars, which is already enough to stimulate the producers to increase production levels.

Bloomberg reported that the spot price of aluminum in warehouses in Rotterdam in Europe was the spot price of LME plus $380 per ton, and the premium water level hit a record high, which was nearly doubled from $200 in the same period of last year. Observers believe that although LME aluminum stocks are huge, but the market's stock supply is scarce, because most of the LME stocks are locked in the ** trading, consumer companies must therefore pay a higher premium to buy aluminum.