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Roller coaster aluminum price concerns

Roller coaster aluminum price concerns

2021-10-30

The October of previous years was the beginning of the peak production and consumption season in China and even the world. The national holiday golden week started the consumption of various small and medium-sized products firstly, such as houses, cars, decoration, food, tourism, and so on. Due to the epidemic, China's rapid resumption of work and production has led to a large-scale return of global orders. Various factories have expanded their production, ran full capacity, and worked overtime, both at domestic and abroad.

But this October, Russia and China, the two major aluminum producers and suppliers, each experienced different dilemas. In addition to the rise in the price of aluminum raw materials, the Russian market has also caused a 350% increase in rail transport costs between Russia and Europe, which has also led to a decline in sales of Russia, and production capacity has become inventory.
In China market, under the background of the strategy of carbon peaking and carbon neutrality, and the slight alleviation of power and production restrictions in September, the demand for building materials from the subsequent impact of the national level of thermal coal regulation and real estate regulation and control policies In terms of weakening and other aspects, after reaching a historical high on October 18 that it is the highest price near the past 10 years , aluminum prices suddenly fell 5% in one day. Just as everyone was happy, there was another bigger drop on the third day. The price of aluminum raw materials has fallen by nearly 20% within 10days. The original price drop was what everyone expected, but the market's response still showed the consistent consumption pattern of the Chinese people-the lower the price, the more negative it is. I dare not place orders if they already have orders  on hands, and customers who are ordering in production want to keep prices down, making the supplier and the demand side have nothing to attend.

Throughout the international market, due to the increase in electricity prices caused by the supply of oil and gas energy, the Aldel aluminum smelter in the Netherlands will stop production until the beginning of next year; Talum in Slovenia and Slovalco in Slovakia have reduced production by 50% and 10% respectively; Alcoa, Rio Tinto, Hydro The distribution of over 900,000 tons of production capacity in Western Europe, and the distribution of over 4 million tons of production capacity in India, such as Aluminum and Vedanta, are all restricted by oil and gas prices and suppliers. Related agencies predict that aluminum prices will continue to rise until early next year.

For downstream enterprises or consumers, regardless of the rise or fall, they can only passively bear it. After all, they hope that it will be a reasonable, compliant, and compliant stable amplitude.