Domestic aluminum prices rose with 2011 optimistic about fundamentals

Recently, LME aluminum has broken through the 60-day moving average and is likely to end consolidation in the short term and make directional choices. Looking at the general trend, Aluminium is in a rising triangle and the price is about to face a breakthrough. In this context, Shanghai Aluminum also began to start rising channels, rising moderately, and trading ranges continued to rise. The smelter production cuts caused by power shortages, strong downstream consumption, and lower investor expectations also boosted aluminum prices, thus pushing Shanghai Aluminum to break through the cabinets.

External strong domestic demand has increased with the recent LME copper price shocks, and constantly refreshed historical highs. Led by this, Lon-Aluminum continued to rise, rising continuously last week, the rate of more than 100 US dollars, and hit a high of more than a month. Judging from the current market sentiment, the overall atmosphere of the external disk continues to be positive. The external disk was strong, and the situation in which the domestic commodity market formed a “surrounding increase” continued unabated, and domestic passiveness and the rising trend began to spread. Recently, with the NDRC increasing the price of gasoline, the market has made some doubts about the strength of price regulation in the future, and the upward trend in policy risk is expected to decrease. In the external trend of rising, the fundamentals continue to improve the situation, the domestic Shanghai aluminum with rising demand, rising momentum is also accumulating.

Fundamental improvement continued to be optimistic for 2011. For the kind of aluminum that is not dominant in its financial attributes, fundamentals are the biggest factor in determining its price trend, while strong downstream consumption supports the rise in aluminum prices, at least limiting its decline. space.
Several major aluminum consumer industries have maintained rapid growth. Among them, the real estate industry still maintains a strong investment enthusiasm. In November, the new construction area reached 134 million square meters, an increase of 8.5% from October; and the area of ​​real estate construction exceeded 140 million square meters, which is also rising. At the same time, as the end of the year approaches, the pressure on affordable housing will also increase. The supply of surprise supplies will also increase the supply of real estate, which will benefit aluminum consumption. In the automotive sector, from January to November, the production and sales of automobiles exceeded 16 million vehicles, maintaining a steady growth year-on-year. The auto market in December is still expected to continue to maintain a hot market. It is a foregone conclusion that sales will reach 17 million vehicles throughout the year.
In November, the output of wire and cable was 2.642 million kilometers, a year-on-year increase of 32.89%. In the previous 11 months, the cumulative production of power cables was 23.985 million kilometers, a year-on-year increase of 26.87%. In the coming year, with the implementation of the 12th Five-Year Plan, the grid investment of the State Grid will exceed 1.7 trillion yuan, which will increase the consumption demand for power cables. Among these, aluminum cables will have a broad application space. This led to the demand for aluminum. In addition, investments such as high-speed railway networks and platforms will also give stable expectations for aluminum consumption in the coming year, which will benefit aluminum's cross-year prices.

Power shortages drive the market atmosphere There is still a hot topic at the end of the year, which is the adjustment of coal prices. With the continuous rise of coal prices in the early period, the power companies have the need for linkage. According to sources, as of the end of October, the five major power groups of Huaneng Group, Datang Group, Guodian Group, Huadian Group and China Power Investment Group had a loss of up to 50%. To make up for the above losses, we must increase at least 0.05 yuan on the basis of the existing prices. In the production of electrolytic aluminum, the energy consumption per ton is more than 14400 kWh, which means that if it is really such an adjustment rate, an increase of 5 cents will also cause a large part of the cost of electrolytic aluminum production costs to rise. This will inevitably be reflected in the price of **, thus supporting the upward price.