Aluminium prices at home and abroad since the beginning of September oscillations, as of September 29, the Shanghai aluminum futures price has from the beginning of 15000 dropped to 13900, or 1100 points, or 7% above. This with aluminium 3 – stark contrast to rally sharply in August, when the Shanghai aluminum rising from 12600 points to 15000 points, up 2400 points. , mainly due to price this time in micro stimulus policies gradually after the end, the Chinese economy once again showed the phenomenon of the weak, and aluminum to slack demand season, and when prices are high, the domestic aluminum enterprises and production is more, aluminium production continues to increase, prices have been high pressure, market outlook is still worrying.
China’s economy is weak
China’s economy in the near future again show weakness, early micro stimulus has failed to make the economy continues to strengthen, so as to make the aluminum production demand is expected to turn pale. Recent data that concerns China’s economic outlook, August industrial output rose 6.9%, than in July fell 2.1%, the lowest level in nearly six years; August power compared to the 2.2% negative growth; August export growth down again and imports slow down to speed up, etc., these investors have cold hearts. In fact, after the Chinese government just give some incentives, the central bank on April 25, June 16, two consecutive directional fall, the national development and reform commission approved in August 7 – focus on a group of railway investment project construction, to spur economic growth. But this is just a stimulus, the Chinese government refused to massive stimulus, which makes economic growth after August – September again.
Aluminum demand season
Influenced by domestic economic weakness, October 9 – aluminum demand season again. A lot of aluminum processing enterprises, since the end of August orders increased, show that peak season comes, but the order number increased obviously than in previous years. Shanghai rich outfit in the near future, according to a survey was conducted in henan province even the annual production of 1000-10000 tons of aluminum processing enterprises are only good for 75% of the capacity utilization, below 1000 tons of small firms is lower. Economic performance weak domestic industries are affected, aluminum consumption large real estate industry, the negative impact of the falling house prices, high inventory, these make aluminum consumption is affected, the peak season which is difficult to form.
Domestic aluminum production continues to increase
Another pressure on prices from rising Chinese aluminium production, 3, 5 month cheap production, production of domestic aluminum enterprises gradually rehabilitation after prices rebound again, has a very big impact. The latest data show that domestic aluminum production in August of 2.0275 million tons, this is the first time China’s aluminium production has reached 2 million tons, year-on-year increase of 8.8%, which is in the national post continuously eliminate excess capacity and limit the condition of new capacity. In fact, over the past few years the northwest new capacity continues to form, and 3 on the mainland – may shut down, some aluminum production enterprise production gradually, increase the aluminum production. May, it is estimated that up to now, the aluminum enterprises and production capacity of 500000 tons.
The dollar would depress prices
The dollar index 81.5 points on August 19, the breakthrough of nearly a year of consolidation area along the formation of upward breakthrough, performance has been pretty strong, formation of non-ferrous metals, including aluminum, great pressure. A strong dollar first, because 2 months after the American economy recovered quickly from the winter cold, the fed exit QE and has a rate hike will steadily, and the dollar strong economic base. Followed by Ukraine in the United States and the European Union joint on economic sanctions against Russia, while the negative impact of the European economy is greater than the negative effect on the U.S. economy, the euro base damage, but also to a strong dollar. Finally is the dollar since September have been oscillating between 78.5-81.5 sideways, up after breakthrough technical buying also strengthen the dollar rally. The dollar is likely to rise to 89, will continue to international price formation pressure.
Anyhow, aluminium by China’s weak economy, its primary aluminum production, the pressure of the dollar, etc. Consider the overall pattern of a bear market, commodity prices within a period of time compression of aluminium prices downward possibility is very large.