Power and production are limited nationwide. Where will the aluminum price go

Aluminum: additional code for power restriction measures

Among the nine provinces named by the national development and Reform Commission, aluminum production capacity accounts for 40% of the country, of which Yunnan issued power and production restriction notices in May, July and September respectively. The latest notice requires that the average monthly output of green aluminum enterprises from September to December shall not be higher than that in August. Guangxi requires that the output of 6 alumina enterprises and 8 electrolytic aluminum enterprises in September shall not exceed 50% and 80% of the average monthly output in the first half of 2021 respectively. As a large power consumer, electrolytic aluminum is greatly affected by dual control of energy consumption. In addition, the resumption and operation of electrolytic aluminum have high requirements for stable power supply, which is difficult to be fulfilled under the current policy. Power rationing also has a great impact on the downstream aluminum processing industry. The social inventory of electrolytic aluminum has accumulated slightly for the second consecutive week, and the inventory reduction expectation in September and October has not been fulfilled. It is necessary to continue to pay attention to the inventory changes after the "Eleventh" festival.

Overseas, the Aluminum Association of India said that the decision of state-owned coal enterprises to significantly reduce the coal supply of non power industry led to the plight of coal shortage in the self owned power plants of aluminum enterprises, and the coal may have an adverse impact in the short term [3].

Figure 10: domestic aluminum social inventory

picture

Source: SMM, research department of CICC

Figure 11: operating rate of aluminum downstream processing industry

picture

Source: mymetal, research department of CICC