The strong rise of Shanghai Aluminum was mainly a technical rebound. At the same time, good news on the external disk also boosted the price of aluminum. The latest US durable goods orders and pending home sales index for May constituted favorable conditions. The rebound in LME aluminum futures prices outside the night led to a stronger Shanghai aluminum futures price.
Recently, the market rumors that the Henan provincial government will implement electricity price subsidies for aluminum smelting enterprises. In this regard, industry sources said that not only the Henan region, Guangxi, Guizhou and other regions are brewing measures to implement preferential electricity prices and electricity price subsidies for local electrolytic aluminum enterprises.
“The subsidy news of Henan Province, which is a major province of electrolytic aluminum, is that enterprises can postpone the payment of 0.08 yuan/kWh of electricity, and wait until the price rises to 17,500 points before repaying, while Guizhou Province’s subsidy is only 0.03 yuan/kWh. A 0.1 billion yuan/kWh subsidy of 2.4 billion kwh was received,†said Jia Jun, an East Asia futures analyst.
Shanghai mid-term analyst Jiang Haihui believes that the Henan government's subsidy for electrolytic aluminum companies is as high as 1,120 yuan per ton of aluminum. After the cost has dropped sharply, electrolytic aluminum companies that had previously stopped production in Henan Province may resume production in succession. The market will increase supply to the latter part of the period. The expectation is obvious. According to the 0.5/kWh net power calculation in Henan, the cost of local electrolytic aluminum is roughly in the range of 16500-17,000 yuan/ton, and after subsidies of 1,120 yuan/ton, the cost should be around 15,400-15,900 yuan/ton.
Experts believe that the subsidy policy may temporarily alleviate the sluggishness of electrolytic aluminum companies. However, as the cost of enterprises is reduced, the output of electrolytic aluminum will be in a situation where supply exceeds demand. The price subsidy policy may become the trigger for aluminum price decline.
Jiang Haihui said that on Tuesday, the Henan government sent a price subsidy of 8 cents per degree to the local aluminum company, and that the price of diving had fallen. Hydroelectric power generation in Guangxi and Guizhou is relatively cheaper compared to thermal power in Shandong and Henan, and these regions have experienced abundant precipitation this year, and more local aluminum producers have resumed production, plus cheap electrolytic aluminum in the northwest region. The production capacity is still being released one after another. Therefore, the oversupply of domestic electrolytic aluminum will be intensified in the later period.
Liu Yuyao believes that local governments subsidize high-cost aluminum companies, which temporarily eases production pressures, but this is not a good medicine. Exacerbating the excess supply situation will only make aluminum enterprises more difficult to manage in the future.
Analyst Jia Wei said that the subsidies for electrolytic aluminum are not through cash subsidies. The resumption of aluminum production is also a requirement of the local government. The enthusiasm of the enterprises is not high. For the aluminum industry that is in oversupply, it is unfavorable. The increase in excess capacity of excess inventory will hamper aluminum prices.
Most analysts believe that the aluminum production capacity will lead to a further decline in aluminum prices, aluminum will continue to maintain the decline in the short-term market, from the long-term trend, the aluminum price is a gradual decline in the future.
In the short term, the possibility of aluminum prices returning to the 16,000 yuan line is low. In the double pressure of increasing upstream supply pressure and unsatisfied downstream demand, Shanghai Aluminum is not vulnerable to change, and prices are expected to fluctuate in the low range of 14700-15500 yuan/ton. Liu Yuyao said, “In the external disk area, the focus of the financial market has recently centered on the EU summit, but the market doubts whether this summit will achieve substantial results. If the outcome of the summit is less than market expectations, aluminum prices may return to a downward trend, test 15,000 yuan. First-line support."
From a technical point of view, yesterday's Shanghai aluminum main 1210 contract price has a strong rebound, and the main long Masukura more obvious, Jiang Haihui said, "I believe that once entering the 15,500 yuan / ton above, a large number of sets of security selling will prevent the price to continue As a result of the rebound, there is still some room for price fall below the aluminum price. Operationally, investors are advised to try to establish an empty order by rebounding to a price above 15,500 yuan/ton.â€
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POM SHEET
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1000*2000
white/black
1.42
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