1. Supply and demand
The relationship between supply and demand directly affects the market pricing of a commodity. When the relationship between supply and demand is in temporary balance, the market price of the commodity will fluctuate in a narrow range. When supply and demand are out of balance, prices fluctuate wildly. The recent aluminum ingot market is in a state of relative imbalance between supply and demand, and the market demand is low under the pressure of high inventory.
2. Supply of alumina
Alumina cost accounts for about 28%-34% of the production cost of aluminum ingots. Because the international alumina market is highly concentrated, most of the world’s alumina (80-90 per cent) is sold under long-term contracts, so very little alumina is available for purchase on the spot market. The recent production reduction of alumina enterprises, so that buyers and sellers have different views on the market, the transaction into a stalemate stage.
3, the impact of electricity prices
At present, the average power consumption per ton of aluminum in aluminum plants of various countries is controlled below 15,000 KWH /t. The experience of aluminum ingots production in some countries shows that it is considered dangerous to produce aluminum when the electricity cost exceeds 30% of the production cost.
However, as China is an energy shortage country, the price of electricity has been raised several times so that the average price of aluminum enterprises has risen to more than 0.355 yuan /KWh, which means that the production cost of aluminum enterprises has increased by 600 yuan per ton. Therefore, the power factor not only affects the production of electrolytic aluminum in China, but also affects the domestic and international aluminum market price.
4. The impact of the economic situation
Aluminum has become an important variety of non-ferrous metals, especially in developed countries or regions, aluminum consumption has been highly related to economic development. When a country or region’s economy develops rapidly, aluminum consumption will also increase in sync. Similarly, the economic recession will lead to the decline of aluminum consumption in some industries, which will lead to the fluctuations of aluminum prices.
5. Influence of aluminum application trend change
The price of aluminum will be greatly affected by changes in the use area and amount of aluminum ingot in major industries such as automobile manufacturing, construction engineering, wire and cable.
Post time: May-12-2022