In demand recovery and supply chain disruption under the double stimulus, aluminum prices and double 叒 yi innovation high!
On Friday, Aluminum rose above $2,900 to close at $2,927.50 a tonne, a 13-year high. That night Shanghai aluminum main 2110 contract intraday as high as 23295 yuan/ton. Lunal hit $3,000 a tonne on Monday afternoon, its highest level since July 2008.
According to reports, local time on September 8-10, the Harbor global aluminum industry summit in Chicago (this is North America’s largest aluminium meeting), many of the participants said that in 2022, most of the time, the whole aluminum industry will continue to have shortage, some participants even expect it could take as long as five years to solve the supply problem.
The move comes as global supply chains backed by container shipping are struggling to keep pace with strong demand for goods and overcome the impact of the COVID-19 pandemic on Labour. The industry’s problems are exacerbated by a shortage of workers at aluminium plants and truck drivers.
They are also waiting to see if Russia, the world’s second-largest aluminium producer, will keep expensive export taxes in place until 2022, according to Jorge Vazquez, managing director of Harbor Intelligence. Harbor Intelligence expects aluminum prices to average $2,570 a ton in 2022, which would be about 9% higher than billon’s average price for the year.
Speaking at the Global Aluminium Summit in Harbor, Mike Keown, CHIEF Executive officer of Commonwealth Rolled Products, said:
“This is just the beginning of a difficult situation for us, which will keep us on our toes.”
Wall Street has upgraded its forecasts for aluminium prices as prices continue to rise. Goldman sachs said the global supply chain outlook was likely to deteriorate and lunal prices were expected to rise further, raising its target price for the next 12 months to $3,200 a tonne.
Citibank expects lal to rise to $2,900 / mt in the next three months and $3,100 / mt in 6-12 months as aluminum prices transition from cyclical bull market to structural bull market. Aluminum prices are expected to average $2,475 / ton in 2021 and $3,010 / ton in 2022.
So what are the main factors holding back the recovery of aluminum supply?
From the perspective of overseas aluminum supply, Cheng Xiaoyong, director of Baocheng Futures Financial Research Institute, believes that overseas epidemic has blocked the recovery of electrolytic aluminum output in the United States, Australia, Russia and other countries. In addition, high container freight and shipping bottlenecks are also a big problem to hinder the export of electrolytic aluminum.
It is worth noting that last week guinea suddenly “changed weather”. Guinea, known as the “kingdom of bauxite”, has been one of the main sources of Bauxite imports to China, sun Weidong, a non-ferrous metal analyst at Dongcheng Derivatives Research Institute, told Futures Daily. “The coup in Guinea pushed up the price of bauxite, and higher costs pushed up the price of alumina.”
In August, due to the shortage of supplies and a large quantity reduction in the supply side of domestic alumina has caused a sharp upward price, has risen nearly 500 yuan/ton since the beginning of August. Alumina prices are expected to have some upside in the future.
From the perspective of domestic supply, electrolytic aluminum capacity expansion is constrained, mainly in the “lack of electricity” and “carbon cutting” two aspects. On the one hand, many provinces and cities power limit measures lead to electrolytic aluminum enterprises power shortage can not be full load production; On the other hand, in 2021, carbon neutralization and carbon peak will be officially implemented, and the dual control of energy consumption will affect some aluminum smelting industries, increase the cost of electrolytic aluminum production, and promote the rising price of electrolytic aluminum.
In the context of limited supply, the demand for aluminum continues to increase, especially the use of new energy has become a new growth point of aluminum consumption.
It is understood that China’s auto industry is gradually shifting its focus to lightweight, according to single consumption calculation, in 2018, the new energy bus industry aluminum consumption is large, is expected to bus aluminum consumption of 210 kg, hybrid bus aluminum consumption of 179.6 kg. The aluminum consumption of BEV and ICE buses is 128.4 kg and 118.7 kg, respectively. However, the aluminum consumption of Chinese cars is still far behind that of developed countries such as the U.S. and Japan.
However, according to statistics, China’s aluminum consumption of new energy vehicles increased year by year. From January to July in 2021, China’s production and sales of new energy vehicles reached 1,504,000 and 1,478,000 respectively, exceeding the annual sales of 1,366,000 and 1,367,000 in 2020, setting a new record high. Therefore, there is still a lot of room for growth in the demand for aluminum for new energy vehicles in the future.
Reprint indicated source：Spark Global Limited information