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Home - News - Jin Jiu into the end, the traditional demand season can also bring how much boost to Shanghai aluminum?

Jin Jiu into the end, the traditional demand season can also bring how much boost to Shanghai aluminum?

September 27, 2023
After entering September, under the boost of the traditional consumption season and domestic policy favorable factors, market confidence is improved, demand is expected to be better, coupled with low warehouse receipt inventory support, promoting the main center of gravity of Shanghai aluminum significantly increased, the highest price rose to 19,585 yuan/ton, although it failed to break the 20,000 mark, but the trend is significantly better than before. In the past two weeks, the whole has remained at a high level above 19200 yuan/ton. At present, Jinjiu has come to an end, how is the downstream demand performance, and how will the subsequent aluminum price trend be interpreted?
Real estate recovery still takes time, the peak season aluminum demand performance is average
From the situation in August, China's macroeconomic data continued to improve, industrial added value and social retail consumption year-on-year growth accelerated and exceeded market expectations, but urban fixed asset investment slowed down and weaker than expected. In the manufacturing industry, industrial equipment, automobiles, semiconductors and other industries and products increased. Investment demand slightly exceeded the seasonal rise, driven by infrastructure investment and manufacturing investment, real estate investment remained low rebound is not obvious.
Since the beginning of this year, as the economy and society have fully resumed normal operation, the real estate market has improved in the first quarter, but affected by multiple factors, since the second quarter, the real estate market sales and development and construction have shown an overall downward trend. In late July, the Political Bureau of the Central Committee clearly pointed out that "we must adapt to the new situation of major changes in the supply and demand relationship of China's real estate market, timely adjust and optimize real estate policies, make good use of the policy toolbox, better meet the rigid and improved housing needs of residents, and promote the steady and healthy development of the real estate market." After that, the domestic favorable policies continue, especially in the real estate field, favorable policies are frequent, the first home loan, "recognize the house does not recognize the loan", in addition, the central bank announced to reduce the down payment ratio and the lower limit of mortgage interest rates, and for the first time reduce the stock of first mortgage interest rates, so that the policy benefits more people, support residents rigid and improve housing demand.
However, the current real estate market is still in the adjustment stage, and there are no obvious signs of improvement in the trend. From the data released in August, market sales and real estate investment are still falling, the first eight months, commercial housing sales area fell 7.1 percent, commercial housing sales fell 3.2 percent. From the investment point of view, in the first eight months, real estate development investment fell by 8.8% year-on-year, the decline has slightly expanded. The decline in the area of new housing starts narrowed, the decline in the stock of housing construction area widened, and the growth rate of housing completed area slowed down. The area of houses for sale and the area of houses for sale did not change much, maintaining a significant positive growth and a significant negative growth trend respectively. However, the frequency of favorable policies in domestic real estate is conducive to boosting market confidence and improving the business expectations of housing enterprises. As the real estate market adjustment and optimization policies and measures take effect and the economy recovers, real estate investment, sales and market operation will gradually improve in the next stage.
Although the policy intensity is strong to drive the downstream sectors are expected to be better, but specific from the downstream demand performance of aluminum, so far, the downstream demand performance this year is relatively general. Since late March, the entire aluminum market has experienced nearly half a year of weak consolidation process, it is reported that most aluminum processing enterprises in May to June experienced a near loss, or even a long-term loss of a situation. After entering Jinjiu, although the policy favorable demand is expected to boost, aluminum prices have stood more than 19,000, but Jinjiu downstream consumption has stabilized and rebounded, the characteristics of the peak season is not obvious, the downstream processing enterprise orders are limited, the consumer side is difficult to have large fluctuations, aluminum processing enterprises sales pressure surge, the current real estate industry recovery is slow, the market expectations are still pessimistic. Although the automotive industry is bright, it is still difficult to make up for the order gap brought by the real estate industry, its high requirements for production equipment, technology, and technology, and high standards have discouraged many small and medium-sized enterprises.
Refinery production at the domestic supply end remained stable, and the source of imported goods increased
Yunnan mainstream production enterprises to resume production work is basically completed, some of the new capacity transfer project put into production, in addition to the production reduction in Shandong, other parts of the country aluminum plant operation is basically stable, in August China's electrolytic aluminum production increased, the National Bureau of Statistics released a report showing that China's primary aluminum (electrolytic aluminum) production in August was 3.6 million tons, an increase of 3.1%. In September, the growth rate of domestic electrolytic aluminum supply narrowed, Yunnan has resumed production enterprises normal operation, Sichuan has no plan to resume production, domestic projects in the production increase is mainly transferred from Shandong to Yunnan a small amount of production capacity, the current domestic supply side no large new production capacity appeared, the domestic supply side of the refinery production situation basically maintained stability. From the cost point of view, alumina prices slowly upward, the cost tends to rise, but the electrolytic aluminum industry profits are high, the cost impact is limited. However, it should be noted that the future into the dry period, or will have an impact on production, production is expected to be easy to reduce difficult to increase, pay attention to the domestic supply changes after entering the dry period.
With the sharp rise of the Shanghai Lumbi value, import profits continued to strengthen, Mysteel statistics show that from the beginning of August, the spot price aluminum ingots import window continued to open, and since September, the average profit of spot aluminum imports has reached 595 yuan/ton, the main contract import profit of converted futures has reached 301 yuan/ton level, and there will be imported aluminum ingots into the country. Short-term supply is still expected to increase. According to customs data, China imported 153,287.39 tons of primary aluminum in August, an increase of 31.54% from the previous month and a year-on-year increase of 210.75%.
The aluminum ingot warehouse has entered the stage of weak accumulation, and the situation of low warehouse receipts in the previous period has continued
Although entering the traditional consumption peak season stage, demand has improved to a certain extent compared with the previous period, but the consumer end is difficult to have large fluctuations, aluminum processing enterprises sales pressure surge, finished product sales, aluminum ingot warehouse since the middle of August, open a new round of the library, more than a month, the library is relatively limited, the recent social library has fallen slightly, according to Mysteel statistics, As of September 25, electrolytic aluminum inventories in China's main market were 499,000 tons, down 7,000 tons from last Thursday and down 10,000 tons from last Monday. At present, the social pool is still at a relatively low level, which has certain support for the aluminum price below, and the subsequent accumulation is expected with the decline in the ratio of aluminum to water and the impact of holidays and other reasons.
In addition, since late March, the previous period of aluminum warehouse into the downward road, nearly two months of warehouse receipts continue to plumb the low, the current period of aluminum warehouse is at a low level, the trend of aluminum prices also has some support.
On the whole, under the joint boost of the traditional peak season and favorable policies, the market is expected to improve demand, boosting aluminum prices higher, in addition, the current low warehouse inventory is still the core problem, aluminum prices below the support is relatively strong. However, from the downstream performance of aluminum in September, the characteristics of the peak demand season are not obvious, and although the performance of photovoltaic and other industries is relatively strong, the inflection point of the real estate industry has not yet appeared, or will remain weak, and the downstream aluminum demand of Silver Ten is difficult to improve more significantly, and the boost to aluminum prices is limited. However, domestic policy to boost economic confidence firmly, if the data to improve, the market confidence should be boosted; If the data is not good, there may be a year-end policy to boost confidence.
(www.profiles-aluminum.com; sales@profiles-aluminum.com).