Jinjiu is not thriving, and the price of scrap aluminum may continue to be under pressure. Monthly review of aluminum market in September

In September, the price of scrap aluminum showed a "V" shaped trend, showing a strong upward trend. Supported by various favorable policies in China, aluminum prices have continued to rebound. The expectation of stable domestic economic growth still exists, and demand is gradually recovering, leading to an upward trend in aluminum prices. However, aluminum prices have recently risen to high levels, and downstream markets are cautious about high prices, with insufficient stock of raw materials and limited order growth. This has led to a low willingness to stock up downstream before holidays, unclear peak season characteristics, and no significant fluctuations in market consumption. Aluminum processing enterprises are facing increasing sales pressure. At the same time, the recovery pace of the real estate industry is slow, and the strong expectations for September in the golden autumn season are slightly disappointed. At the end of September, the traditional holidays are approaching, and the Double Festival is approaching. The market is relatively stable in the festive atmosphere.
1. Production data and import and export situation
In August, China's alumina production was 7.08 million tons, a year-on-year decrease of 0.8%; The cumulative production from January to August was 54.537 million tons, a year-on-year increase of 0.6%. The production of electrolytic aluminum reached 3.602 million tons in August, a year-on-year increase of 3.1%; The cumulative production from January to August was 27.226 million tons, a year-on-year increase of 2.9%. In addition, the production of aluminum materials and aluminum alloys has also increased, with increases of 6.6% and 9.9% in August, respectively. The cumulative production also shows an increasing trend. In terms of imports and exports, China's exports of unwrought aluminum and aluminum products reached 490100 tons in August, but the cumulative exports from January to August decreased by 19.4%. Aluminum oxide exports increased by 26.1% in August, but the cumulative export growth from January to August was also 17.5%. In terms of imports, unwrought aluminum and aluminum products increased by 38.9% year-on-year in August, and the cumulative imports from January to August increased by 15.8%. In addition, the import of aluminum ore sand and its concentrate has also increased, with a year-on-year increase of 9% in August and a cumulative import increase of 11.8% from January to August.
2. Macroeconomic and Fundamental Pressure
The Federal Reserve's interest rate meeting dispelled market expectations for a rate cut, stating that interest rates will remain high for a longer period of time. At the same time, the unexpected decline in European economic data has increased the risk of recession, further supporting the strength of the US dollar index. Although aluminum prices have continued to rise despite low inventory levels, the high expectations of "Jinjiu" have gradually fallen short, and the market has shown a characteristic of "peak season not booming". The traditional consumer demand situation in the recycled aluminum market is not as expected, leading to increased disappointment in the market. The orders of enterprises are weak or even declining, and demand during peak seasons has not been fulfilled. The enterprises of recycled aluminum alloy ingots have also experienced significant differentiation, with small and medium-sized enterprises struggling to survive, and the entire recycled aluminum industry falling into a quagmire.
3. October outlook: scrap aluminum prices may come under pressure
Overall, the scrap aluminum market is undergoing a fluctuating adjustment after an increase. The market needs time to gradually digest the previous gains, while also finding an appropriate price range. Although aluminum prices are showing an upward trend under low inventory conditions, we must recognize that "Jinjiu" has not been as expected and the peak season characteristics of the market are not yet clear. Therefore, it is expected that scrap aluminum prices may come under pressure and fluctuate in October.