This year,aluminum price benefits greatly from the structural supply- side reform of the expected reduction. Among the base metal, aluminum prices is strong and in the overall upstream.The recent aluminum price between CN¥13,700-13,900 / ton, supported by the stable cost and the decline of inventory.
According to the producing plan, this year, electrolytic aluminum production capacity will be much higher than the demand increase,so it estimated that the aluminum price will be lower. But the supply side of reform will reduce aluminum production capacity,thus supply and demand balance is expected to improve, supporting the aluminum price.
The cost is rising and selling prices continue to decline.Thus the profits quickly fell to the cost line,which forces aluminum producers cuts the production capacity. SMM data show that the reduction of aluminum is mainly concentrated in Shanxi and Henan, due to the environmental inspector and the rising raw material price.
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