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Why Has The Aluminium Price Recently Fallen?

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On August 9, 2017, I published an article What Makes Aluminium Ingot Price Raising Sharply in Chinese Market, where I indicated four key factors boosted aluminium prices. Now, however, the situation has changed:
The Production Restriction was less than expected that lead to unrestrained supply
      Since November, the price of domestic alumina has dropped more than ￥300 /ton, falling harder than 8%. Due to the beaching of the limited production in Luliang (Shanxi Province) area, the production of other producing areas is not as large as expected, and the shortage of alumina is difficult to realize.In addition, due to strict limits on the production of aluminum oxide in Henan province, the demand for bauxite has decreased, the price of bauxite in various regions of China has been loosened, and the weak cost has also put pressure on the price of alumina.In the case of large-scale loss of electrolytic aluminum enterprises, the profits of aluminum oxide factories will continue to be compressed.As a result, the average theoretical cost of electrolytic aluminum enterprises has decreased by nearly ￥ 1,000 from ￥ 16,000 /ton and will continue to decline, and the support for the aluminum price is significantly weakened.
Demand remains weak and Inventories are high
Begin the winter, the consumption of aluminum is gradually entering the slack season, and the weak current situation is difficult to improve. It is understood that in November, aluminium profile enterprises have a working rate of about 60%, and aluminum sheet & foil is about 70%, which has not been improved from month to month. The downstream buyer purchases on demand, the market volume is light, the main area electrolytic aluminum outlet volume does not rise but fall. As parts of the region enter the stage of environmental protection, it is inevitable that downstream will be affected while limiting supply. The aluminium processing plant in Jiaozuo (Henan Province) and other areas have the production limit and the closure situation. The excess aluminum will be converted into aluminum ingots. In addition, the transportation of Xinjiang region in the winter is once again tested, and the local inventory has increased significantly. In the case of the aluminium ingot decrease from Xinjiang, there is still no significant decrease in the inventory, so there is a great pressure on the domestic social inventory. Inventory inflection is not expected to occur during the year and is expected to hit another record high, with high inventories putting pressure on aluminium prices
Overall, the author thinks that the recent aluminum market in the case of no good news to stimulate, rebound kinetic energy is insufficient, the market bearishness atmosphere is still relatively strong, and aluminum price remains easy down hard up, in the short term it is expected that aluminum prices remain weak oscillation.
The above is for reference. Hoonly Aluminium help you get right price of aluminum extrusion at the right moment.

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