Under the influence of the sluggish demand in the traditional market and the decline in aluminum exports, the pull of new energy vehicles and new infrastructure on the incremental demand for aluminum has been completely covered, superimposed on the rapid increase in the supply side, the Shanghai aluminum market will drop by 16,000 yuan / ton.
Supply side: domestic production has entered a rising channel
The resumption of domestic electrolytic aluminum production exceeded expectations, and the production capacity reached a record high. In terms of domestic supply, as of May, the domestic electrolytic aluminum operating capacity was 40.882 million tons, a year-on-year increase of 4.2%; the electrolytic aluminum production was 3.463 million tons, a year-on-year increase of 3.4%. From the perspective of provinces, Shandong, Xinjiang, Inner Mongolia and Yunnan are the main producing areas of domestic electrolytic aluminum, accounting for 20%, 15%, 15% and 11% of the total domestic production respectively, and the four provinces (regions) together account for 61% of the domestic production. .
Since the beginning of this year, stimulated by the policy support of local governments and the decline of electricity prices in some regions, the resumption and commissioning of domestic electrolytic aluminum production has accelerated. As of May, the operating capacity of electrolytic aluminum in Yunnan was 4.76 million tons, an increase of 2.09 million tons compared with the end of 2021. It is the main area for the resumption of electrolytic aluminum production in China, accounting for 72.5% of all domestic growth capacity in 2022. Among them, an aluminum company in Shandong withdrew 200,000 tons of production capacity to replace its new production capacity in the Yunnan plant.
In the second half of the year, it is expected that the production capacity will still increase by more than 2 million tons, and the supply pressure will gradually increase. In terms of production resumption, it is expected that 1.35 million tons of production capacity will be resumed in the second half of the year, mainly in Guangxi, accounting for 58.4% of the production capacity to be resumed. In terms of new production capacity, it is estimated that there will be 1.092 million tons of production capacity waiting to be put into operation in the second half of the year, mainly in Yunnan, Inner Mongolia and Guangxi, accounting for 93.6% of the total production capacity to be put into production. Overall, there are still 2.442 million tons of new production capacity in the second half of the year, accounting for 6.0% of the current domestic operating capacity, and the pressure on domestic electrolytic aluminum supply is gradually increasing. In terms of output, because the increase in output slightly lags behind the increase in production capacity, domestic electrolytic aluminum output is still in a fast-rising channel, which has a restraining effect on the upward space of aluminum prices.