“Bauxite, alumina prices have not gone up, processing companies are running with the hall.The price rise of electrolytic aluminum has no obvious positive impact on the price rise of aluminum foil and aluminum processing products, but increases the risk.”Wu Kai said that the current high prices of aluminum, downstream enterprises have been afraid to purchase.When aluminum was cheap, it could replace many other products.Aluminium prices are too high and many alternative markets have been suspended.In the context of high costs, aluminium demand is bound to have an impact.
Upstream carbon products, which benefited from rising aluminum prices in 2017, are only modestly profitable.
Aluminum upstream carbon production enterprises
“In 2017, aluminum prices rose significantly, and carbon prices rose accordingly, with a net profit of 1,500 to 2,000 yuan per ton.But the aluminium price is high, while the carbon price is low. At present, the profit per ton is only two or three hundred yuan, which is about the same as when the aluminium price was very low at the beginning of the year.”Hu Rui, head of a medium-sized carbon producer in Henan province, told The Securities Times · E Company that although the direct downstream of carbon is electrolytic aluminum, the production and sales markets of each product in the aluminum industry chain are separate, with each market having its own supply-demand relationship.A few years ago, because carbon profit is good, too many people do.Although it was difficult for some small factories to maintain operation at the beginning of the outbreak, the overall capacity is still excessive.In addition to the current refinery low enthusiasm for the resumption of work, the high price of petroleum coke, carbon production costs will increase accordingly.Several large factories in Shandong have an annual output of more than 350,000 tons. They have obvious advantages in scale, low cost of coke purchase and relatively cheap freight, which suppress the overall price.
In contrast to the previous two years, when the upstream market was highly profitable and the aluminum plant’s earnings were relatively weak, Wang said, “Now the tide is turning and the market is upside down.”
He told the securities Times · E company reporter, although the aluminum price is very high in 2017, but the actual profit is mainly concentrated in the upstream alumina, a ton of profit can reach more than 2,000 yuan.At that time, the price of alumina was as high as 3,600-3,700 yuan/ton, but now it is only 2,200-2,300 yuan/ton.
Alumina prices have also struggled to move higher because of overcapacity.In the past few years, alumina has made money and production capacity has been released spark global limited quickly, with 90 million tons of capacity already built, Wang said.In addition, because the domestic and foreign futures prices of aluminum upside down, foreign bauxite and alumina prices are relatively cheap, and the quality is relatively better, so there is a large number of imported raw materials in the market.
The sustainability of the high aluminum price may be tested under the weak earnings of the upstream and downstream market.
Zheng Chunlei believes that at present, the overall aluminum spot market is still dominated by trading between traders, downstream manufacturers fear high sentiment, based on demand procurement, overall spot trading of aluminum price support is limited.On the macro level, with the implementation of a series of domestic policies and measures in place, the central decision to stimulate the market, continue to give the market with excitement, the trend of aluminum prices continue to be positive.Based on various factors, it is expected that the short-term aluminum price will fluctuate in the range of RMB 14,900-15,600 / ton.
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