Aluminum inventory and price relations are different inside and outside

Since the Spring Festival this year, both domestic and foreign aluminium inventories have increased substantially. However, the strong Alcoa aluminum and weak Shanghai aluminum still have not improved. In early March, the price ratio between Shanghai Aluminum and London Aluminum was once lowered to 6.50, which was 5% lower than before the Spring Festival and has fallen by nearly 30% from the high point in 2009. In this regard, domestic industry researchers said that the relationship between aluminum inventory and prices at home and abroad can not be compared, especially in the fact that inventory is a true reflection of changes in supply and demand.

Huang Fulong, chief researcher of aluminum industry at Guangzhou Kai Investment Commodity Consulting Co., Ltd., told the ** Daily reporter that under normal circumstances, there is always a certain link between commodity consumption and inventory, but it is necessary to distinguish between different economic development environments and market infrastructure. At present, aluminum inventories in the aluminum market cannot fully reflect changes in the supply and demand relationship in the market. Because excessive pledge warehousing agreement has caused the aluminum aluminum stocks to lose liquidity, the increase or decrease in short-term stocks is more regarded as the behavior of market participants adjusting the position structure and using inventory as a pledge. Although the inventory of producers of the statistics of the International Aluminum Association (IAI) reflects the situation of supply and demand of aluminum in the international market to a certain extent, due to the fact that the inventory structure of the market is still in a period of readjustment after the crisis, the level of stock preparation and circulation of the manufacturers is significantly lower than that of the crisis. The period is high, so it cannot be regarded directly as an oversupply, which in turn puts pressure on L&A aluminum prices.

"If we remove the changes in the inventory structure caused by the changes in the economic environment, we will examine the IAI inventory. We can see that the current IAI inventory is not substantially oversupplied due to supply or consumption. In fact, the international aluminum inventory is now in the IAI. The lowest interval since historical statistics (1973), Huang Fulong further analyzed.

In his view, before the ratio of stocks restricted by pledged warehouse receipts in the aluminum market fell to a certain extent, or before the international market inventory circulation model returned to normal economic development, investors could not directly view the supply and demand relationship as the result of changes. Instead, it should be seen more as a reference for judging market participants' use of aluminum inventory as a pledged asset and specific operational behavior in the financial market.

Compared with international stocks, domestic aluminum spot inventory changes can better reflect the supply and demand relationship in the domestic market, and thus the price response is also more sensitive than the London market. Last year, due to the impact of domestic energy-saving and emission-reduction policies, the supply of aluminum in the domestic market continued to decline. Spot inventory began to gradually decline after rising to more than 1.2 million tons in mid-2010. Before the Spring Festival, domestic aluminum stocks continued to decline due to the impact of the Spring Festival and bad weather, but the data quickly rebounded after the holiday.

“After the holiday, due to the slow recovery of downstream consumption, the market’s capacity for digestion has been limited, and inventory has begun to rise sharply. Especially since late February, with the end of the Chinese Spring Festival, aluminum ingots sent to the coastal areas have picked up again, and the inventory growth rate has further increased. Accelerated. According to Huang Fulong's introduction, as of March 4th, domestic stocks of aluminum stocks were as high as 745,700 tons, an increase of 234,500 tons compared with the pre-holiday period, of which the inventory in Guangdong increased by nearly 120,000 tons, and the inventory in eastern China increased by 105,000 tons.