It is expected that the supply and demand of China

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It is expected that the supply and demand of China's aluminum market will be balanced in the second half of the year

since the beginning of this year, the relevant departments of the aluminum industry have issued a number of policies and carried out a large-scale clean-up and rectification of electrolytic aluminum production capacity. On April 14 this year, the capacity projects under construction by electrolytic aluminum enterprises in Xinjiang were ordered to stop, involving a capacity of 2million tons. So far, the reform of electrolytic aluminum supply side has really kicked off. However, since the announcement was issued, in the follow-up implementation, about 1.2 million tons of capacity under construction has been suspended, and only 20000 tons of capacity has been suspended, which has inhibited the new capacity as a whole, but has little impact on the existing built capacity. By the middle of June this year, Shandong Weiqiao group's electrolytic aluminum began to reduce production by 250000 tons

compared with the operating capacity of 8.5 million tons in Weiqiao and the current total electrolytic aluminum operating capacity of more than 38 million tons, the reduction of 250000 tons has little impact. The production reduction of Xinjiang aluminum enterprises has a limited impact on the national output during the year, but it has an exemplary and guiding role in the clean-up and rectification of illegal production capacity in other regions. In the later stage, the relevant aluminum enterprises in Shandong and Inner Mongolia also began to reduce production. At present, the illegal production capacity in Shandong is mainly concentrated in Weiqiao and Xinfa, with a total of 2.6 million tons. Considering that the aluminum downstream industries in these regions are very concentrated, the reduction of production is also very likely to be a slow surplus. The output affected by the reduction of production throughout the year is still limited, but it is still beneficial to alleviate the excess supply

for the aluminum market, the expectation of market supply contraction pushed up the aluminum price due to the repeated voices of supply policies such as environmental protection and capacity management in the early stage. However, in the subsequent time, the market found that the implementation effect of the policy was not as smooth as expected, and once again doubted the supply reform. However, near the middle of the year, under the high pressure of the policy, the market was still nervous about the production reduction made by many places in response to it

in the first half of the year, while the policy supported the high operation of aluminum prices, it also gave impetus to the resumption of production of the compliance capacity that was shut down in the early stage. However, the policy expectation was strong, but it was not fundamentally implemented, resulting in the continuous increase of compliance and non-compliance capacity. According to statistics, together with the first phase of the project, in the first half of 2017, China's newly put into production electrolytic aluminum production capacity was 2.21 million tons, and the resumed electrolytic aluminum production capacity was 635000 tons, while the production reduction was only 470000 tons

now the aluminum industry is at the forefront of supply side reform, and the changes in the aluminum market are closely related to policy incentives

the risks of the aluminum market in the second half of the year still come from the uncertainty of the policy and the implementation of the policy. Through sorting out the reform policy, the central government began to gradually clarify the pace of the reform of the electrolytic aluminum industry. It was carried out step by step at its own pace, with a smooth transition between the compliance capacity and the illegal capacity, on the premise of not having a severe impact on the market. Therefore, the pace of the development of China's aluminum market in the second half of the year is still controlled by policies, and finally achieve the effective compression of production capacity

in terms of industry supply and demand, the import of bauxite in the upstream of the aluminum industry has successfully found a new stable resource supplier such as Guinea, and domestic aluminum industry enterprises have also gone out to promote the chain development of non grain bio based materials industry in the sea, and set up factories abroad. Within the suppliers of alumina processing, the overall upstream raw material supply environment is relatively loose. The capacity of alumina and electrolytic aluminum in the middle reaches will be compressed to varying degrees this year due to the impact of supply policies. Although there was a surplus of alumina production capacity in the first half of the year due to the rapid resumption of production, due to the flexible production of many local alumina plants under Chalco, this contradiction was resolved, and the alumina supply will remain abundant in the future

in the first half of the year, under the expectation of supply policy, the growth rate of electrolytic aluminum supply was still faster than the demand, resulting in a certain degree of excess. The cumulative inventory of electrolytic aluminum has reached a historical high of 1.2 million tons, and the current inventory did not show a seasonal downward trend when Beckman talked about xpressn lux. From a series of detailed measures close to the middle of the year, the fillers in these pipes are designed as cell scaffolds, the senior management has always been confident in the supply reform, and the implementation of the policy has also been substantially promoted. For the second half of the year, whether from the point of view of the policy or after the introduction of the policy, the operation time given is not much, and it is believed that the pace of clearing illegal production capacity in the second half of the year will be accelerated. In terms of downstream demand for aluminum, although real estate has cooled this year, it will not fail as an engine to ensure the bottom of the economy, and other aspects are mediocre

it is estimated that the average annual consumption growth rate will be 6% lower than that of last year. In the second half of the year, the supply and demand of aluminum market is expected to become balanced or even slightly short

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