First, in 2014, the main new capacity in the northwest region was basically put into operation in the second half of the year. In particular, after September 2014, nearly 3 million tons of electrolytic aluminum capacity in Xinjiang and Shandong Weiqiao were gradually put into operation. According to our estimates, after three months of power-on preparation, these new production capacity will accelerate the production of aluminum liquid.
Secondly, the aluminum plant is subject to the pressure of the number of orders and funds throughout the year. The driving force before and after the Spring Festival is seriously insufficient, and the willingness to lengthen the production period is more obvious. This may make the aluminum ingots surplus and the seasonal characteristics of the inventory increase strengthened.
Cost collapse caused by the plunge in crude oil
At present, the Middle East relies on its cheap crude oil and natural gas prices to become an important base for electrolytic aluminum production, and is an important exporter of US and Japan electrolytic aluminum. India is also rich in coal resources and is also in the stage of rapid expansion of production. It is expected to increase production by 700,000 to 1 million tons in 2015. The high-cost production capacity of traditional aluminum enterprises such as Rusal and Alcoa has been reduced, and the marginal cost has dropped significantly. At the same time, the low-cost production capacity of the Middle East and India has entered a large amount, resulting in the overall cost of aluminum prices going down, and the current sharp decline in crude oil and thermal coal has strengthened this effect.
China's electrolytic aluminum industry logic is similar. First, low-cost production capacity in Xinjiang, high-cost production capacity in the central and southwestern regions was squeezed out; second, Shandong, Henan, Xinjiang and other places have higher self-supplied electricity, although China's electricity prices are not market-oriented, but with thermal coal Long-term weakness, the cost of self-supplied electricity will drop significantly. The electrolytic aluminum industry is a typical overcapacity industry, and the decline in electricity costs is easily transmitted to the price of aluminum ingots. The collapse of costs will be more serious for internal and external prices.
Spot market will face greater suppression
The author believes that in the first quarter of next year, the pressure on the spot market will be greater than the same period in 2014. First, the surplus of seasonal surplus and new capacity output will appear. Secondly, under the expectation of oversupply, Xinjiang enterprises tend to maintain the value of aluminum ingots that are not sent to the spot market due to capacity or other problems. In the end, we noticed that during the period from August to September 2014, due to the long-term suspension of Shanghai aluminum futures at 14,000 yuan / ton, a large number of aluminum manufacturers involved in the air singles, a large part of which was concentrated in 1501. 1502 contract. It can be observed that the current positions in the near month and the total positions are in a higher position, and the probability that these positions will be delivered in the future is greater.
Based on the above viewpoints, the author believes that the selling pressure of aluminum prices in January and February 2015 should not be underestimated. The combination of new capacity output, seasonal excess and cost collapse will make aluminum prices even lower than the first quarter of 2014. The probability of the main contract falling below 12,600 yuan / ton is great.