First half of 2010 Aluminum Market Analysis
First, the production
(A) the production of alumina
According to the China Nonferrous Metals Industry Association statistics, the first half of 2010, cumulative production of 14.71 million tons of alumina, an increase of 38.6%.
In early 2010, the continuing rise in domestic aluminum prices led to rising alumina prices. At higher alumina prices, under the guidance of a quarter of China's alumina enterprises to resume production has been basically completed, while a number of new production capacity has also been or will be put into operation. Although the second quarter, falling aluminum prices caused the poor performance of alumina market, but most of the domestic aluminum companies are still profitable, so production was not affected significantly. The first half of the new Alcoa alumina project in Zunyi, Shandong Aluminum & Power Group sent the letter and the new alumina project in Shanxi Province Shanxi Luneng projects have been formally entered a new alumina production stage, and like alumina project in Guangxi Huayin Aluminum Chongqing alumina and aluminum project, also will be gradually put into operation in the second half. According to Antaike statistics, as of the first half of alumina production capacity to 200 tons / year.
From a regional point of view, Shandong alumina production was restored, an increase of 68.9%. Also new in Guangxi rapid expansion of alumina production capacity will also make the alumina production in China more than a third of Shanxi province. First half of 2010, Guangxi had accumulatively produced 2.778 million tons of alumina, an increase of 43.4%;
(B) electrolytic aluminum production
According to China Nonferrous Metals Industry Association statistics, the first half of 2010, cumulative production of 8.32 million tons of primary aluminum, an increase of 49.3%.
With the gradual recovery of the aluminum market in China last year, China's electrolytic aluminum enterprises in early 2010 ushered in the full release of production capacity. In the first half despite the drought and power shortages and other factors, but overall, a higher operating rate of the national aluminum company, a number of new production capacity has gradually put into operation. May 14, the National Development and Reform Commission, the National Energy Board and the State Electricity Regulatory Commission jointly issued the "clean-up of high energy consumption enterprises on preferential rates and other issues" which called for a comprehensive clean-up of high energy consumption around the business benefits of electricity . Henan Province, led by several major aluminum producing provinces from June 1 will be different levels of price increases, which will cost the future production of electrolytic aluminum enterprises tremendous pressure.
As of the end of June, China's primary aluminum in the operating state of production capacity of approximately 17.5 million tons. Which includes both old and restart production, but also a number of new and expansion of delivery capacity.
Second, import and export
With the full recovery of domestic electrolytic aluminum production enterprises, China's alumina demand is also the beginning of the gradual increase in domestic aluminum companies to start a large area to some extent reduce our imports. First half of 2010, China imported a total of 2.351 million tons of alumina, down 12.2%. Among them, the January imports reached 67.5 million tons, the highest in recent years.
Early return to normal at home and abroad than aluminum makes aluminum-related products, import and export situation of balance. Imports last year brought a lot of pressure on today has clearly improved, among which the volume of imports of primary aluminum and aluminum was the most prominent. First half of 2010, China imported 156,000 tons of primary aluminum, down 84.5%; imported aluminum 71,000 tons, down 42.7%. Imports fell to a certain extent, ease the pressure on the supply of the domestic aluminum market, but with the beginning of China's electrolytic aluminum enterprises operating rate rising, the future of the sharp rise in domestic aluminum production aluminum market will also bring huge impact. As foreign demand for exports compared to last year have been significantly improved and, therefore, promote the export of aluminum products in China. First half of 2010 China exported 1.027 million tons of aluminum, an increase of 92.7%.
Third, the market price of the situation
Following last year after 4 consecutive quarters of gains, the domestic aluminum prices continue upward trend at the beginning. Rapid rise in international aluminum prices and lower the load to reduce the domestic production of some aluminum dual stimulation, the Shanghai Futures Exchange aluminum record in early January last year the highest since September. However, weakness in the domestic spot market resulted in aluminum Shanghai aluminum on the red fundamental lack of support, beginning in late February from Shanghai aluminum prices showing a downward direction. In mid-April introduction of rules regulating the real estate industry to become yet another cause downstream aluminum fuse phase, while the high inventory, high yield enormous pressure on the domestic aluminum prices pose a heavy blow.
Trend of the first half of the London Metal Exchange and Shanghai aluminum similar to aluminum. London after the beginning of aluminum quickly ascribed to exit the market in general economic stimulus policies in China anxieties, London in mid-January start of aluminum in the callback. Market confidence after the U.S. and China with fiscal and monetary policy stance and have been restored, London aluminum prices to rebound. South American countries by the end of February earthquake that occurred in Chile, copper metal plates, represented a substantial strength, Donald also took the opportunity once again upside aluminum. April Goldman Sachs caught in "the door to fraud," and Standard & Poor's lowered ratings of Greece and other EU countries, resulting in commodity markets reversed direction. With the renewed weakness in economic data in Europe and America, the market re-initiation of the second bottom of the economic concerns continued to drop aluminum London and it has started.
First half of 2010, the London Metal Exchange average spot and futures prices for three months were $ 2,129 / ton and $ 2,126 / ton, up 49.7% year on year respectively and 45.8%; with the second half, respectively compared with the average price rose by 11.6% and 9.6%.
First half of 2010, the Shanghai Futures Exchange, the contract month and March the average price was 16,087 yuan / ton and 16,459 yuan / ton, up 28.7% year on year respectively and 34.9%; with the second half of the average price decreased when compared 4.9% and 11.8%. Overall, the performance of China's aluminum prices in the first half is stronger than most of the time in the international aluminum prices.
First half of 2010 from the situation, China's aluminum industry is currently facing the following problems:
(A) primary aluminum production rising to tremendous pressure on the domestic aluminum market
With the domestic economy gradually improved during the first half of my primary aluminum output increased significantly. Although the downstream consumption and has significantly improved compared to last year, but the production of excessive growth makes the supply pressure is still prominent, but also suppressed domestic prices to rise.
(B) aluminum exports suffered foreign policy implications of trade protection
Because the extent and speed the recovery of national economies vary, so the current is still in trade protectionism multiple period. Following Canada and Australia, the United States part of the extrusion material production enterprises and trade unions on March 31 and to the U.S. Department of Commerce and the U.S. aluminum extrusions Fair Trade Commission submitted an application to on the origin of aluminum extrusions from China product anti-dumping, countervailing duty investigations. U.S. Department of Commerce will be held June 24, 2010 and September 7, 2010, respectively, the preliminary ruling on the case to countervailing and antidumping preliminary. Such as the establishment of the final decision will be made of aluminum re-export of frustrated.