Aluminum spot prices fell sharply. According to the Nonferrous Metals Industry Association, from January to April, the country produced 2.07 million tons of electrolytic aluminum, which is more than 30% higher than the national electrolytic aluminum output from January to April. In the same period of last year, it increased by 26%; the inventory in the first quarter was 330,000 tons, which was an increase of 80,000 tons from the end of last year and was about 30% higher.
Correspondingly, China's aluminum prices fell to 15,580 yuan per ton in May this year, a decrease of 1,920 yuan in the previous month. According to industry sources, the current situation in the domestic electrolytic aluminum industry is actually a reflection of the supply-demand relationship caused by blind investment and low-level expansion. The serious overcapacity of domestic aluminum production has even caused a great impact on the international aluminum market.
Therefore, the price drop and inventory increase are almost inevitable results. Newer data released by the International Aluminum Association (IAI) show that all types of aluminum inventories held by manufacturers in 12 countries (all western countries) except China and Russia at the end of May 2004 increased by 176,000 compared with the previous month Ton to 3,092,000 tons, in May last year, this number was 3.026 million tons. Unprocessed aluminum stocks increased by 4.6% year-on-year to 1.739 million tons in May. In addition, with the recent transaction volume reduction, the spot price of alumina in the international market has dropped by 80-90 US dollars / ton to 340-360 US dollars / ton. The main reason is that due to the recent power cuts and the implementation of government macro-control measures, the purchasing power of Chinese buyers as the main driving force of the market has been reduced. The data shows that China’s alumina imports fell by 18% to 459,492 tons in May. At the same time, the spot market for aluminum oxide is modest, with thin trading. Despite the current domestic aluminum inventory growth, prices fell back, but Barclays Capital in a special report released last week, said that China's basic metal demand may be temporarily saturated, imports are slowing. Metal prices have reached a high point in recent years, coupled with the recent credit crunch, which has led to a reduction in imports, and companies have begun to reduce their previous stocks of raw materials. This phenomenon is evident in copper, aluminum and other fields. The report predicts that the company’s consumption of inventories will continue in the short term, which may lead to tight spot prices in the second half of the year, which will drive prices higher.