Aluminum Prices Weakened In September/Japanese Aluminum Premium/Global Aluminum Stock

- Sep 21, 2018-

1. Aluminum Industry News:

1) Affected by US sanctions, Rusal's Armenal aluminum foil factory in Armenia has begun to reduce production.

2) At the end of August, the inventory of electrolytic aluminum in Japan's three major ports was 323,600 tons, an increase of 4.3% from the previous month.

2. According to foreign news on September 19, two sources directly involved in pricing said on Wednesday that some Japanese aluminum buyers agreed to finalize the aluminum premium in the fourth quarter at $103 per ton, as spot premiums fell. This level is 22% lower than the current quarter's $132 per ton. The previous three consecutive quarters rose.

3. Analysis of aluminum price: Shanghai aluminum has limited space. Since September, the aluminum market has weakened. On the one hand, Sino-US trade frictions and poor domestic economic data have brought weak macro expectations. On the other hand, domestic winter environmental protection and production policies have fallen short of expectations. We believe that the price of aluminum is limited to the downside. After the release of pessimistic expectations, there is still the possibility of upward repair of aluminum prices in the market.

4. According to a report released by the World Bureau of Metal Statistics (WBMS) on Wednesday, the global primary aluminum market supply shortage was 302,000 tons from January to July 2018, and the annual supply shortage in 2017 was 1.146 million tons. The demand for primary aluminum in January-July was 35 million tons, a decrease of 758,000 tons from the same period of the previous year. From January to July, primary aluminum production fell by 147,000 tons. LME stocks increased by 88,000 tons in July, mainly due to increased stocks in Malaysia and Singapore. At the end of July 2018, the total inventory was 2.58 million tons, and at the end of 2017 it was 2.346 million tons. At the end of July 2018, the total stocks of the four major exchanges in London, Shanghai, the United States and Tokyo were 2.108 million tons, an increase of 165,000 tons from December 2017. From January to July, global primary aluminum production fell by 0.4% year-on-year. China's primary aluminum production is estimated at 19.396 million tons. China's apparent demand decreased by 1.1% from the same period of the previous year. Global primary aluminum demand decreased by 2.1% from January to July 2018. In July 2018, the global primary aluminum production was 5.1126 million tons, and the consumption was 5,212,900 tons.