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What Makes Aluminium Ingot Price Raising Sharply In Chinese Market?

China Primary Aluminium price will rise in October, likely jumps to CN¥ 17,000/t.

LME aluminium has gained further. The light metal contract which closed at US$2,114 per tonne on Tuesday, October 3, reversing its current downtrend toward US$2,066 per tonne, has jumped to US$2,139.50 per tonne on Wednesday, October 4.

When the holidays in China is over, the backlog of orders increases, nearly all electrolytic aluminium enterprises in the north are in output restriction, Aluminium prices are bound to strengthen.
KEYWORDS: COAL
Coal as the power source is one of the production cost of aluminium, its price has been most affected by many factors mainly by domestic reform and transport; the prices have rebounded from a lower of ¥300 per ton to ¥600 per ton, and short-term supply growth remains limited. Therefore, the operating loss of power plant is expanding, and the higher electricity bill becomes an important topic in the market.

KEYWORDS: FREIGHT
Transport costs have been raised, and the New Deal has raised the cost of transporting: Xinjiang Railway Bureau has issued a notice to adjust the price of freight in the fourth quarter. The preferential price would be reduced from 15% to 8%, which is equivalent to the current freight increase of ¥35 per ton.

KEYWORDS: DOMESTIC HOT MONEY
Domestic speculative investment in speculative property has sniped, the property market hot money has been tracked down by New Deal, then parts of them swarmed into the market of stockpile commodities. China's capital has shocked the world by hyping commodities. There are many fundamental factors behind the Aluminium ingot price boom, but much of it is driven by hot money.

KEYWORDS: SUPPLY-SIDE REFORM
In April, Four Ministries, including The National Development and Reform Commission, launched a campaign to clean up illegal projects in the electrolytic aluminium industry. The special operation focus on four key content, respectively is Enterprise self-inspection (completed before May 15th), Local inspection (completed by June 30th), Special Spot check (completed before September 15th), Supervision and Correction (completed by October 15th).
The implementation of the policy will be accelerated in the second half of 2017. As of July, the supply-side reform of electrolytic aluminium had affected 3.95 million tons of capacity. However, as the reform is becoming accelerated, emission permits, future self-readiness check, production capacity will be reduced 3 million to 5 million tons. Supply expectations will tend to be tight and may even be in short supply.

Then, what will happen?

With all the factors above, price inflation is also a cause. 
The spot price is high, the problems of supply shortage and mismatching demand in the area of origin caused by short-term transport will not be solved, and aluminium ingot prices continue to be strong.
More aluminium products please visit: https://haluminium.com

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