aluminum and electrolytic aluminum

Since entering in 2007, the domestic and foreign aluminum price shown dazzling. First, in February, domestic electrolytic aluminum prices have continued to fall, and the international aluminum price fluctuations to maintain the momentum. Second, despite since the second half of 2006 the aluminum prices fall from a high point by more than 50%. But the strong global demand for aluminum made aluminum price not to weaken due to the reduction of costs, but maintained a steady upward trend.

Electrolytic Aluminum Price Fall

In February of this year, domestic electrolytic aluminum prices continue to fall, fell by 1.35% year-on-year. While the international aluminum price are maintaining fluctuation. Electrolytic aluminum prices will continue to fall, and the decline rate of domestic aluminum price will be higher than the international aluminum price declines.

The industry professionals believe that the reason continuous decline of the electrolytic aluminum prices is the huge potential for the release of electrolytic aluminum production capacity. Electrolytic aluminum production capability can be very substantial in future. At present, utilization rate of electrolytic aluminum production capacity is only about 75%~78%. If all the remaining production release, it would increase the supply of electrolytic aluminum of three million tons. According to the State Development and Reform Commission statistics, there are currently 11 electrolytic aluminum projects in the construction, with the building capacity of 1.12 million tons. The proposed projects are 10, with a total capacity of 1.4 million tons, which means there will be 2.52 million tons newly added capacity in future. According to the agency's optimistic forecast of domestic consumption of electrolytic aluminum, even if consumption up to 25%, only increase the consumption of 2.135 million tons, an increase of supply is far greater than the consumption.

Therefore, from the potential increase, the situation that domestic excess supply of electrolytic aluminum market will continue to exist. As to stock, domestic output of electrolytic aluminum in 2006 is up to 9.19 million tons, the consumption is 8.54 million tons, and the domestic market supply has exceeded 650,000 tons. Therefore, domestic electrolytic aluminum prices in 2007 will be affected by easy and continued to decline. Aluminum stockpiles around the home and after the Spring Festival, there has been an obvious increase also shows that the supply side are quite lenient.

Currently, electrolytic aluminum prices could not escape the decline. Since the second half of 2006 due to the alumina prices fell sharply, Alumina production to profit from the upper middle reaches of electrolytic aluminum production, electrolytic aluminum plant, which began to cause global restart idle production capacity. Sources said that the United States idle production capacity have started operation, which includes the United States in Washington intalco aluminum factories Colombia Fox aluminum, Ormet and so on. In addition, due to the cancellation of export rebates for electrolytic aluminum and increase export tariffs, domestic electrolytic aluminum export restrictions So a significant increase in domestic production of electrolytic aluminum, international aluminum price impact limited.

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