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Environmental protection and supply reform put pressure on Shanghai Aluminum Co., Ltd. to see the ups and downs of aluminum prices in 2018. How about the cost

2017 saw a combination of supply side reform and environmental protection and production restriction, which led to a sharp rise in aluminum prices first and then a downward pressure, showing a trend of first rising and then declining. At the beginning of the year, Shanghai aluminum had the lowest point in the year, but then the supply side reform was opened, giving the market confidence. In addition to the environmental protection policy of steel pressure with a certain shape and the strong influence of lun'an aluminum, Shanghai aluminum has started the road of making great contributions in the spring of last 2014 for nearly one and a half months

however, in the first half of the year, the domestic social inventory soared from 340000 tons to about 1.2 million tons, and the operating capacity of electrolytic aluminum increased from 36.37 million tons to 38.24 million tons. The soaring inventory has put great pressure on Shanghai aluminum. The price trend is tangled between policy expectations and fundamentals, and has experienced a wandering period of up to half a year

in the second half of the year, as the government publicized the illegal production capacity in Inner Mongolia and Shandong, the illegal production capacity was quickly implemented and cleared. After the news that Weiqiao shut down the illegal production capacity appeared, the implementation of supply and demand reform was stronger than expected to ignite the market. Within three trading days, Chalco rose from 14700 to 16400 yuan, a cumulative increase of nearly 10%. Subsequently, local environmental protection supervisors, as well as the expectation of environmental protection and production restriction in the heating season, pushed up the cost of electrolytic aluminum by a large margin and supported the high operation of aluminum prices. However, at the same time, the domestic social inventory of aluminum ingots continued to rise from 1.2 million tons to 1.65 million tons

since the beginning of November, the news that the production limit in the heating season in the aluminum market was less than expected came one after another, resulting in a phased supply-demand gap in the aluminum market in the fourth quarter. After losing the expected support, the aluminum price quickly fell back to the first line of 14800 yuan

supply side reform and environmental protection are still key influencing factors

the industry research report points out that aluminum is the most far-reaching non-ferrous metal affected by China's supply side reform this year. The sharp rise in aluminum prices at the beginning of 2017 was due to the supply side reform, while the production was limited in the autumn and winter heating seasons, which periodically limited the growth of output

at the second non ferrous industry chain Quantitative Investment Summit Forum hosted by Beijing Capital futures on December 16, zhangxuefeng, assistant to the general manager of Shanghai Chaojin group, said that reviewing the overall situation of aluminum in 2017, there would be no mistake in following the pace of policies. Paying attention to inventory and supply balance will lead to some misunderstandings. Therefore, he believes that the main line of aluminum in 2017 is the introduction of policies and the interpretation of policies on different stages of the market

how will these two policies affect aluminum prices in 2018? Donghao, fund manager of Kaifeng Investment Management Co., Ltd., pointed out that the supply side policy is still the biggest uncertainty about aluminum. It is for this reason that different research institutions have different conclusions. Even if the heating season is already in progress, there are still many uncertainties. Will the policy be strengthened or mitigated after the lead screw and nut are used as parts? Does the shortage of raw materials cause overseas production reduction? What about the trough with reduced production after the heating season

it can be seen that supply side reform and environmental protection policies are still important factors to support domestic aluminum prices next year, including the government's emphasis on future production capacity indicators and the structural impact of environmental protection on the supply of raw materials. In foreign countries, attention should be paid to the progress of the future aluminum production capacity and the impact of the unexpected decline in inventory. In the longer term, the domestic and foreign aluminum supply and demand will be in a rebalancing process in the next few years, and the fluctuation range of aluminum price will slow down relatively as a whole

considering the support of environmental factors for aluminum price, Li Kewen and Wang siran, analysts of Jinrui futures, believe that the fluctuation range of Shanghai aluminum price will be between yuan/ton next year. The overseas companies also found that the equilibrium price of lunlun aluminum was around 2100 US dollars/ton on the capacity cost curve. As there is still a gap outside China, the price of lunlun aluminum is relatively stronger than that of Shanghai aluminum. It is expected that the price fluctuation range of lunlun aluminum next year will be between US dollars/ton

2018 aluminum market fundamentals is the key to judge the cost

referring to the characteristics of the aluminum market next year, zhangxuefeng believes that first of all, we need not pay too much attention to the changes in consumption, because we have a strong interest in in in-depth cooperation with innovative enterprises. "Aluminum has a wide range of uses, and new fields have been constantly explored, so consumption is relatively stable, maintaining a growth of 10% - 15%

the second is inventory. Although the judgment on inventory in 2017 is not accurate, it should return to inventory in 2018. As usual, for example, the inventory of 1.7 million tons will continue to accumulate during the 2018 Spring Festival, which is difficult to change. Therefore, he believes that the main line of 18 years can focus on inventory. Inventory actually suppresses prices in stages

finally, the production cost of aluminum. From the beginning of 2016 to the present, only two relatively large industrial losses occurred in November and December of 2016. However, by December of 2017, most enterprises may have suffered losses. The supply side reform may continue next year. Under this background, the probability of continuous loss of electrolytic aluminum enterprises is small, so the next step to judge the price is to focus on the actual manufacturing cost. From the price and form of 2018, the overall volatility will rise, and the overall average price focus will rise. If the market is optimistic, the inventory will be suppressed and may last until the second half of 2018. Overall, the aluminum market has little change in 2018

the cost of aluminum is actually a dynamic process. What is the bottom line for the decline of aluminum oxide? Zhangxuefeng pointed out that in the context of supply side reform, there is little possibility of long-term or substantial losses in the electrolytic aluminum sector. The cost of alumina in China is about twothousand four to twothousand five. Now the actual transaction price has fallen below threethousand. He believes that although the cost changes dynamically, it is less likely to return to November 2017 due to the long-term loss of alumina

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