The start of 2020 is difficult, and all walks of life have been tested by many factors, and the alumina industry is no exception. Although the outbreak has brought some difficulties to the operation of some alumina plants, the price of alumina has also ushered in a long-lost rise.
At present, the country continues to strengthen the "epidemic prevention, production" goal, with the epidemic prevention and control continues to be strict and gradually controllable, strengthen economic development continues to put on the agenda, in the aluminum industry, whether it is the resumption of work or transportation, are in the process of mitigation.How long can the long-lost rising trend of alumina prices last?How will it change with the form of the epidemic?This wave of price rebound, the alumina market, is good or bad?
At present, it has entered late February, and the following data have been obtained from the investigation of the current operation status of the alumina industry. According to Zhuochuang monitoring data, China's alumina production capacity totaled 83.8 million tons, the current operating capacity of 64.3 million tons, the capacity operation rate of 76.73, the capacity operation rate is basically the same as last week, but the phenomenon of enterprise pressure production has increased.
In fact, due to the impact of the epidemic, there are three major problems at this stage that are still restricting the production and supply of alumina, which is also the main reason for the increase in alumina prices.
Raw material supply tight
Let's take a look at the tight supply of raw materials. As we all know, the raw materials needed for alumina production are bauxite, caustic soda, lime and coal.
First of all, in terms of bauxite, needless to say, domestic ore, affected by the epidemic, the main reason is that the resumption of work slows down and the failure to deliver it to the factory is the secondary reason. Domestic alumina enterprises are generally in short supply of domestic ore. Some enterprises with their own mines, such as Chinalco and the State Electricity Investment Corporation, are relatively less affected due to their own active mine production with certain continuity. The situation of imported ore is relatively good, however, due to the shortage of short-term steam transportation, the resistance to dredging is relatively large, affecting the inventory level of imported ore from individual alumina plants in Inner Mongolia and Shanxi.
Then caustic soda, local areas of the domestic liquid caustic soda market according to their own supply and demand flexible adjustment of shipments, the market mentality is flat. Chlor-alkali enterprises have poor shipments, logistics and transportation still affect shipments, chlor-alkali enterprises continue to maintain low-load construction, Henan, Shanxi alumina plants across the province procurement and transportation efficiency is low, affecting its raw material inventory level.
Logistics delivery difficulties
The second is the shipment of alumina plagued alumina market. At present, alumina railway shipment is basically normal, but the impact of automobile transportation is still large. Mainly because the current road vehicles and drivers are limited, alumina delivery efficiency is difficult to improve in a short time, and low delivery efficiency led to some enterprises own inventory than the previous increase in the situation.
In terms of shipping, most of the alumina enterprises in the early stage of the import of ore in the port state, belongs to the pre-epidemic orders, the current protection from the volume of the impact is not large, transport to form part of the constraints. For example, Zhongzhou Aluminum, Shandong Aluminum, Weiqiao Group and so on. At present, the main influencing factor of imported ore supply is still domestic railway and road transportation, even in this industry, there is a balance of alumina and bauxite in the port capacity.
With the recent significant increase in the resumption of car drivers, the alumina inventory of the above-mentioned enterprises began to show a downward trend, and the pressure was significantly reduced.
Comprehensive impact of other factors
An outbreak affected different industries, large and small, and the impact on other industries also had an indirect effect on the alumina market.
Such as alumina production and shipping needs of this kind of accessories, at present, packaging bags are also in a tight supply state, the main reason is that the industry's factories have not yet achieved a full resumption of work, resulting in certain constraints. The supply of packaging bags is more related to the size of alumina packaging. At present, the relatively concentrated areas of influence are mainly in Shandong and Henan, and the larger ones are mainly in Shandong.
In addition, although the situation is gradually improving, people in the society still have a more cautious attitude. Except for a few provinces, the overall personnel flow and economic activities have not yet returned to the normal situation before, and the alumina industry in the general environment is naturally affected.
The "long-lost" price increase
In the beginning of 2020, the outbreak of new crown pneumonia, due to the alumina plant raw fuel transportation is blocked, the national alumina production, alumina prices began to rise.
For the alumina industry chain, the most concern is how to go after the outbreak of alumina prices. Is to continue to rise, or hit the top down. The price of alumina rose once in May 2019. Domestic alumina manufacturers gradually reduced production due to environmental protection problems, which led to a decrease in the total inventory in the society. In addition, in early May, the Red Mud Dam of Xinfa Jiaokou Alumina Plant was ordered to rectify, and the price of alumina rose from 2800 yuan/ton to 3150 yuan/ton in about two weeks.
As can be seen, the upward momentum behind it is the rapid decline in social inventories coupled with unexpected events. On the other hand, the main cause is a domestic outbreak. Some people in the industry believe that this wave of rise will continue until late March and will fall back.
As the market believes that the alumina plant production reduction is due to the difficulty of raw fuel transportation, is a short-term factor, in view of the epidemic control has entered the end, Shanxi, Henan part of the high-speed has been partially liberalized, is expected to soon be fully liberalized. Although the current alumina prices will continue to rise, but after the transport liberalization, alumina prices will fall slightly, March prices or will return to normal.