Home News

The decline of aluminum price remained unchanged at the end of March, and domestic aluminum mills took active measures to deal with it

Certification
Good quality Aluminium Profiles for sales
Good quality Aluminium Profiles for sales
Customer Reviews
We have been using YueFeng Aluminium as a supplier for a number of years, however since the new management team took over responsibility about four years ago they have become not only a supplier they have become a strategic partner supplying not only parts to our business but also solutions and advances in extruded Aluminium components.

—— Bretti--Manufacturing Director

YueFeng continue to provide excellent manufactured products and offer services aligned perfectly to our requirements. They are able to dovetail into our fluid sales requirements whilst consistently delivering to schedule.

—— Gavin Sykes--Managing Director

Your products are very popular in our market.

—— Mr. Clive

Good Quality, Best Service supplier that we met until now.

—— David Little

You always can give me the best plan ,and it lets my customer feel great,i hope we can have another chance to cooperation.

—— Michael

I'm Online Chat Now
Company News
The decline of aluminum price remained unchanged at the end of March, and domestic aluminum mills took active measures to deal with it
The decline of aluminum price remained unchanged at the end of March, and domestic aluminum mills took active measures to deal with it

Abstract: with the explosive spread of the overseas epidemic, the export of Chinese aluminum and its products will decline sharply. Under the circumstances that domestic demand has yet to recover and external demand has been tested, the difficult days for China's aluminum enterprises are difficult to reverse for the time being.

At the end of March, the decline of aluminum prices has not changed, domestic aluminum mills strive to take measures to reduce losses. Both public and private information show that aluminum plants are quietly reducing production and losses by overhauling in advance, or striving for a reduction in electricity prices, or waiting for "cooperation" in the downward price of raw materials such as coal and anodes. In short, aluminum plants are trying to implement the "extreme cost" strategy. From the point of view of the actual progress, the effect of cost reduction can not catch up with the decline rate of prices, and the total losses of aluminum plants continue to accumulate and expand. With the explosive spread of the overseas epidemic, China's exports of aluminum and its products will decline sharply. Under the circumstances that domestic demand has yet to recover and external demand has been tested, the difficult days for China's aluminum enterprises are difficult to reverse for the time being.

The scale of production reduction in aluminum plants has been expanded, and the commissioning of new capacity has been delayed.

Recent research by Aladdin (ALD) shows that the aluminum plant has further increased its efforts to reduce production. As of March 30th, the domestic production capacity has been reduced or stopped by a total of 400300 tons (including the unfinished parts that have been implemented). Although it does not seem to be much, but the trend of spread can not be ignored. Chinalco's Shanxi new material began to shut down on the evening of March 20, and it is expected that it will be completed on April 8, with a cumulative production reduction of 70,000 tons; Dongxing Aluminum will continue to shut down more than 20 units this week after reducing production by 102000 tons in mid-March, with a cumulative production reduction of 132000 tons; large group enterprises in Inner Mongolia, Shandong and Yunnan have also begun to be concerned about the overall situation of market operation and consider their own appropriate adjustments according to external changes. It is believed that the number of production cuts in April will increase. While the aluminum plant has reduced production, the willingness to put into production of new capacity has also declined. For example, Yunnan Shenhuo said that its second production series has been suspended due to market reasons. Although Yunnan Wenshan and Yunnan Hongtai plan to start production at the end of April and August, according to a comprehensive evaluation, it is still doubtful whether the production node can be really realized as scheduled.

The average loss in March is more than 1,000 yuan, and the loss is expected to continue in April.

The downward trend of aluminum prices continued. In terms of raw material costs, the prices of coal, alumina, and pre-baked anodes all rose to a certain extent in February. Affected by the purchasing cycle of raw materials, the overall cost of electrolytic aluminum rose sharply in March. According to a preliminary evaluation, the national weighted average complete average cost in March was RMB13335 per ton. Compared with the monthly average spot price of RMB12285, a loss of RMB1050 per ton of aluminum. If calculated according to the current spot price of RMB11500/ ton of aluminum ingots, the loss is more than RMB1800/ ton. Of course, the prices of major raw materials, including alumina, coal and pre-baked anodes, have begun to decline since late March, and costs are expected to fall in April. However, the aluminum price in April is not expected to perform well, and it is highly likely that the average price is less than RMB12000, so the loss state of the industry will continue and may continue to expand.

Aluminum mills are willing to control the price of goods and increase shipments.

After aluminum prices fell below 12,000 in the market panic, more electrolytic aluminum enterprises chose not to ship, reducing the losses caused by the continuous decline in aluminum prices. In the previous stage, the epidemic was effectively controlled in China, and the slow recovery of consumption made electrolytic aluminum enterprises feel that it would slowly get better after a long period of time. However, with the outbreak of the overseas epidemic, the epicenter of the earthquake shifted from Europe to the Americas and from Italy to the United States, and the market was increasingly worried about global consumption, which was constantly broken or even suppressed. For example, a large domestic group, due to market judgment, long industrial chain and strong anti-risk ability, periodically establish inventory of finished products, slow down delivery, and promote high processing fees for aluminum rods and bars. With the change of the global epidemic and the economic pattern, the judgment is re-established, and at the micro level, the cash flow of the enterprise will not slow down for a long time, and the enterprise also changes its strategy and begins to sell normally. These surveys indicate that in the later stage, the operation of large enterprises to establish inventory firm prices or processing fees will be significantly reduced, the flow of finished products that have not formed orders in the market will gradually recover, and market prices and processing fees are likely to continue to be under pressure.

The spread of overseas epidemic affects the export of China's aluminum products.

According to customs statistics, the annual export volume of aluminum and its products and aluminum wheels in 2019 is as high as 9.05 million tons. Judging from the export market situation in the first two months of 2020, the total domestic export volume of aluminum and its products is 1.084 million tons. Considering that the export market has not been obviously affected by the epidemic in March, but under the influence of the sharp decline in benchmark prices, some export orders are cancelled or renegotiated. In addition, due to the lag in order execution, domestic exports were more early-signed orders in the first two months. With the decline in consumption in Europe and the United States, the export situation after March is not optimistic. Aladdin (ALD) estimates that aluminum exports in March are about 600000 tons, and exports from April to May are expected to decline significantly. This also means that domestic exports of aluminum and its products will fall to about 1.7 million tons in the first quarter of 2020, down more than 20% from 2.2285 million tons in the fourth quarter of 2019. Exports of aluminum and its products are expected to drop by about 1 million tons in the first half of the year.

There is a very vivid saying that the first half of the epidemic is to prevent and control the spread of the epidemic, and the second half of the epidemic is to resume work as soon as possible to boost the economy. China is moving from the first half to the second half. European and American countries hurriedly entered the first half and fell into a fierce battle with novel coronavirus because of their slack in the early stage. With the outbreak of the epidemic in Europe and the United States, more and more enterprises in Europe and the United States have begun to choose home isolation, staying at home, leading to a direct decline in consumption. At present, more than 100 automobile factories in Europe, the United States, Japan, South Korea and other vehicle manufacturing industries have been shut down. It has a great impact on the export of various forms of aluminum products such as aluminum alloy in China, and the blocking of exports, which is the bulk of China's domestic consumption, directly increases the pressure on domestic sales, which makes the rebound of aluminum prices under further pressure.

From the perspective of application microcosmic, small examples of aluminum consumption reflect big problems.

Give another real case around us. Aladdin (ALD) field research around Beijing, the annual consumption of more than 100 tons of terminal aluminum enterprises, due to a drop in orders, the procurement of aluminum profiles stopped, the enterprise resumed work again, waiting for downstream orders to increase, the enterprise mainly produces aluminum electric window openers, the main users are concentrated in office buildings, high-speed rail stations and terminals and other areas, while most of the infrastructure in this field has not yet been fully resumed, raw material procurement has not yet begun. The upstream aluminum profile enterprises also transmit the impact of a decline in orders, which mainly purchases aluminum profiles from the peace aluminum industry.

Pub Time : 2020-04-02 10:49:56 >> News list
Contact Details
YueFeng Technology Co., Ltd

Contact Person: Mr. James Wong

Tel: 0086 186 6296 3676

Send your inquiry directly to us (0 / 3000)