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August 2004 Aluminum Market Report and September Investment Outlook
one. Macroeconomic Analysis 1. In the first half of 2004, there were already 20 electrolytic aluminum enterprises in the country that had completely stopped production. The results of macroeconomic regulation and control achieved initial results. In the first half of 2004, the profits of the electrolytic aluminum industry in China dropped drastically, and 20 electrolytic aluminum enterprises in the country have completely stopped production. The rise in electricity prices, the low price of alumina, the fall in electrolytic aluminum prices all the way down in May, and other factors all contributed to the increasingly difficult survival of China's electrolytic aluminum enterprises. According to data from the China Nonferrous Metals Industry Association, aluminum smelting enterprises (including alumina and electrolytic aluminum) realized a profit of 5.93 billion yuan in the first half of this year, an increase of 84.28% year-on-year, which was significantly lower than the 121.75% increase in the profits of non-ferrous metals enterprises above designated size over the same period. The margin, and the profit of the independent electrolytic aluminum company decreased. In June, China Aluminum Corporation, which was mainly linked with the China Nonferrous Metals Industry Association, had a profit of only 100 million yuan for 10 large-scale electrolytic aluminum enterprises. Of these, 9 of the 9 independent electrolytic aluminum enterprises were not profitable or loss-making. In the first half of the year, 20 electrolytic aluminum companies have completely stopped production and have left the market. There were only 7 companies that stopped production in June. Wang Huajun, director of the Information and Statistics Department of the China Nonferrous Metals Industry Association, predicts that one-third of the country's aluminum plants will have suffered losses in June. The rise in electricity prices is a major factor in the decline in profits of electrolytic aluminum companies. As the electrolytic aluminum industry is a high-energy-consuming industry, the average power consumption of 1 ton of aluminum is as high as 15,200 kWh, and the electricity cost before the country adjusts the electricity price accounts for more than 35% of the cost of electrolytic aluminum production. Therefore, the impact of rising electricity prices on the electrolytic aluminum industry is particularly serious. . Moreover, starting from the second half of the year, companies that build power plants themselves must also pay fees to the country. Some experts predict that the increase in electricity prices alone will increase the cost of electrolytic aluminum by no less than 3 billion yuan a year. In addition, the high alumina prices as a raw material for electrolytic aluminum production have also exacerbated the decline in profits of electrolytic aluminum companies. While the cost has increased, the prices of electrolytic aluminum in domestic and foreign markets have been falling all the way since May. From the perspective of the international market, the average spot price of LME aluminum was 1,62.22 U.S. dollars per ton in May, and the average price of three-month futures was 1,633.43 U.S. dollars per ton, down by 6.2% and 6.3% respectively from April. In China, according to statistics from the National Bureau of Statistics, the average domestic spot price of electrolytic aluminum in May was 15,791 yuan per ton, which was a decrease of 1,767 yuan per ton from 17,558 yuan per ton in April, a decrease of 10.1%. The price in June was higher than that in May. It fell by 627 yuan/ton, a decrease of 4%. Taking into account that the country's electricity price policy is implemented from June, part of the first half has not yet been implemented. With the gradual implementation of various measures, the development of the industry in the second half of the year will be even more severe. The current difficulties in the development of the industry will objectively help eliminate backward SMEs and enhance the competitiveness of large enterprises. The data shows that due to the significant reduction in the profitability of small and medium-sized enterprises, some enterprises are unable to sustain their production and their losses have increased dramatically. From January to May, electrolytic aluminum industry added 12 new loss-making enterprises, of which 11 are small and medium-sized enterprises. As of the end of May, there were a total of 38 electrolytic aluminum companies in China that suffered losses. Of these, 34 were small and medium-sized enterprises with an accumulated loss of 113.323 million yuan, which was 1.8 times more than the same period of last year. It should be said that the macro-control measures adopted for the overheated investment in the electrolytic aluminum industry have achieved initial success. 2. Chinalco Group proposes to suspend the introduction of more stringent regulatory measures. In response to the recent investment booms in electrolytic aluminum and other industries, relevant departments of the State Council have successively introduced a series of macro-control policies to increase regulation and control, in order to ensure the healthy development of the industry. The blind investment and low-level expansion of the aluminum industry have been effectively suppressed to some extent. At the same time, the production and operation of electrolytic aluminum enterprises are also in trouble. To this end, China Aluminum Corporation, in response to the difficulties and existing problems faced by the current aluminum industry, has recently submitted to the relevant departments of the State Council the “Report on Continuing to Implement the Current Import and Export Trade Policy of the Electrolytic Aluminum Industry†after listening to the feedback from the member units. Urge the relevant departments of the State Council to continue implementing the 8% electrolytic aluminum export tax rebate policy, suspend the electrolytic aluminum processing trade, suspend the cancellation of the alumina import registration system, and create a stable domestic and foreign market environment for the national electrolytic aluminum enterprises to prevent the electrolytic aluminum industry from rising and falling. It caused undue losses to the country. Since the beginning of this year, under the combined effects of a number of macro-control measures, the expansion of production capacity in the electrolytic aluminum industry has significantly declined. A large number of proposed projects were suspended or postponed, and the completed capacity was postponed and put into operation. According to incomplete statistics, the capacity of suspended electrolytic aluminum construction was 1.47 million tons, the capacity of electrolytic aluminum was slowed down by 900,000 tons, and 1.2 million tons of capacity had been built to postpone production. Some of the existing production capacity has been discontinued or semi-discontinued. Due to the increase in electricity price, the lowering of export tax rebate rate, the combined effect of alumina prices and environmental pressure, 400,000 tons of production capacity has been suspended. The increase in output of electrolytic aluminum has declined significantly. The growth rate of exports of aluminum and aluminum alloys was much lower than that of imports, and net exports decreased by 31.8% year-on-year. At the same time, however, the production and operation of electrolytic aluminum enterprises are also in trouble. As the electricity price increases by an average of 4 cents per kilowatt-hour, the production cost increases by 600 yuan per ton of aluminum; the export tax rebate rate is lowered by 7 percentage points, and the general trade export increases the cost by about 1,000 yuan; although the current alumina price has declined, it is still higher than normal. The level is at least 1,500 yuan per ton, and the cost per ton of aluminum is increased by 3,000 yuan. As a result, the total cost per ton of aluminum has reached 16500-17,000 yuan, while the current market price of electrolytic aluminum is only about 15,500 yuan per ton. According to incomplete statistics, more than 50 large and medium-sized electrolytic aluminum enterprises under the jurisdiction of China Aluminum Industry Group are in a state of deficit in the face of the current severe market situation, and the amount of losses has increased. Therefore, it is imperative to suspend the cancellation of the electrolytic aluminum export tax rebate policy. (1) Although electrolytic aluminum is a high-energy-consuming product, due to the fact that China's electrolytic aluminum production capacity is mainly distributed in the Midwest and Northeast China, it has little impact on the power shortage in the eastern and coastal regions. According to statistics, in 2003, China produced 5.56 million tons of electrolytic aluminum, which consumed approximately 83.4 billion kilowatt-hours of electricity, which accounted for 4.5% of the country’s annual electricity generation. However, the output in the Midwest and Northeast China was 5.05 million tons, accounting for 90.8% of the total output. These areas have relatively abundant power supply. Other industries are relatively backward. The development of electrolytic aluminum is one of the better ways of digesting surplus electricity in these regions. The output of electrolytic aluminum in the eastern and coastal areas is only 510,000 tons, accounting for 9.2 of the total output, and the power consumption is 7.55 billion kWh, accounting for about 0.92% of the power generation in these areas. Therefore, the power supply shortage in these areas will not be fundamental. influences. (II) A comprehensive analysis should be conducted on the import and export trade of electrolytic aluminum. In 2003, although China exported 110,000 tons of aluminum and aluminum nets, but it also imported about 510,000 tons of waste aluminum and aluminum, which was finally considered as 2003. China still has a net import of 400,000 tons of aluminum, which is calculated at a rate of 15,000 watts per ton of aluminum consumed, equivalent to an import of 6 billion kwh of electricity. From January to May this year, China’s net aluminum export volume was 65,000 tons, but at the same time it also imported 98,000 tons of aluminum and 255,000 tons of waste aluminum. In fact, from January to May, China’s net imports of aluminum were approximately 288,000 tons. This is equivalent to a net import of 4.32 billion kwh of electricity. Looking at the development trend of the electrolytic aluminum market for many years, the electrolytic aluminum export tax rebate policy has played a significant role in the development of China's aluminum industry and stabilized the domestic aluminum market price. It has also created a large amount of foreign exchange revenue for the country. The export tax rebate for electrolytic aluminum has been reduced from 15% to 8% (adjusted as high as 46.6%), which is equivalent to a decrease in the competitiveness of electrolytic aluminum exports by around US$100. The resulting market effect is already evident. At present, under the premise that most electrolytic aluminum enterprises are operating at a loss, if we cancel the 8 percent electrolytic aluminum export tax rebate policy, it will inevitably cause great pressure on the domestic electrolytic aluminum market, which will worsen the already struggling electrolytic aluminum enterprises. Processing trade is a flexible and effective trade mode for companies to conduct international operations. According to statistics, in the electrolytic aluminum export, the general trade pattern accounts for 10%, and the processing trade pattern accounts for 90%. There are three reasons for this situation: First, while importing alumina, production companies require foreign companies to re-sell aluminum ingots. Therefore, the company has chosen the processing trade mode; second, some companies do not have the qualification for importing general trade and must go through processing. Imports of alumina by means of trade maintained normal production. Third, enterprises chose processing trade in order to enjoy preferential tax policies, reduce production costs and improve product competitiveness. The implementation of processing trade provides enterprises with a flexible mode of trade, enabling them to make choices between general trade and processing trade depending on the circumstances in order to avoid operating risks. It not only provides a good environment for the electrolytic aluminum enterprises to go to the international market, but also brings economic and social benefits for the electrolytic aluminum enterprises themselves. In addition, proceeding from the national interest, processing trade is also a very important economic growth mode for expanding employment, stabilizing the people's livelihood, and ensuring social stability in China. On the other hand, regarding the alumina import registration system, Chinalco believes that it is appropriate to liberalize the general trade scope of alumina. In 2000, the import registration system for alumina general trade formulated by the State Economic and Trade Commission, the Ministry of Finance, the Ministry of Foreign Trade and Economic Cooperation, the State General Administration of Customs and other ministries at that time only granted China Aluminum Corporation and China Minmetals two enterprises with alumina. Trading rights. One of its original purposes is to prevent the waste of resources and limit the blind start of domestic electrolytic aluminum. Through the optimized allocation of domestic aluminum oxide and imported alumina market resources, the self-baking tank electrolytic aluminum enterprises with small scale, backward technology and environmental protection standards are appropriately restricted and regulated. With the continuous upgrading of the technological and equipment level of enterprises in recent years, the scale of production of some enterprises has gradually expanded, and companies with production capacities of more than 100,000 tons are gradually increasing, and thus the total demand for alumina continues to grow. In order to support the development of these large-scale enterprises, in 2002, the State granted the aluminum oxide general trade management rights (for own use only) to eight companies such as Lan Aluminum and Yun Aluminum. It is understood that by the end of 2003, the number of enterprises with a production capacity of 100,000 tons or more has increased to 31. Therefore, it is recommended that the state give appropriate qualifications to those enterprises that meet the national industrial policy, meet the national examination and approval procedures, and have a certain level of production capacity. . It is still too early to cancel the alumina import registration system, and it is contrary to the original intention of the system, which is contrary to the direction of the current series of macroeconomic control policies. With the cancellation of the alumina import registration system and the loss of control over alumina imports, projects that have been suspended or delayed in China may be resumed, and companies that have stopped production and semi-discontinued production may be reborn. Then, the effective results achieved by the state’s macro-control will probably be lost. Will pay off. At the same time, it will also cause China to purchase imported alumina bullion and raise prices, causing more companies to suffer losses. 3. Chalco downgraded alumina prices On August 1, Chalco said that the company lowered its alumina price by 12.8% to 3,750 yuan (453 US dollars) per ton. Since the beginning of April this year, China's spot alumina import prices have fallen by more than 40% due to the difficulty of liquidity in China's smelters, and China's domestic alumina demand has been sluggish. Since April, the Chinese government has adopted several credit tightening policies to cool down the overheated economy, especially the electrolytic aluminum industry that suppresses excessive investment. Traders said that due to the reduction of alumina imports in China in the past three weeks, many smelters have low inventory levels, and it is estimated that between October and December, smelters will increase purchases to replenish stocks. The price of imported alumina that is currently taxed in China's ports is at RMB 3,550-3,650/tonne, unchanged from the previous two weeks. The spot alumina CIF China port price is 305-315 USD/ton, compared with 310-315 USD/ton 10 days ago. 4. The SASAC issued a notice that the central government’s acquisition of electrolytic aluminum companies was restricted. On August 3, the State-owned Assets Supervision and Administration Commission of the State Council issued the “Circular on Strengthening the Supervision over the Acquisition of Central Enterprises†(State-owned Assets Planning 2004720). Enterprises that have acquired overheated industries such as steel, cement, and electrolytic aluminum have made strict regulations. The SASAC raised five points of caution, stressing that companies that acquire these industries must report to the SASAC beforehand, and that overseas acquisitions must first be agreed by the SASAC. The notice said that since the second half of last year, the state has gradually increased macroeconomic regulation and control over the overheated investment in the steel, electrolytic aluminum, and cement industries, and carried out the clean-up of fixed assets investment projects. In this process, there are some issues that are worth noting in the acquisition activities of the central enterprises, especially in the acquisitions involving these industries. The outstanding performance is that some enterprises' acquisition activities are inconsistent with the state's industrial policies, which are inconsistent with the main business of the company, lack of sufficient assessment of the targets to be acquired, and weak awareness of risk avoidance. A few enterprises also have the tendency to expand blindly. two. Supply and demand analysis Macro-control, elimination of outdated production capacity On July 29, Lanzhou Aluminum Co., Ltd. had already operated 38 more than 60 sets of self-baked electrolyzers for 28 years and stopped production. So far, the self-baked cell production process and equipment that had made great contributions to the development of Lan Aluminum have been completed. Lanzhou Aluminum Co., Ltd., the predecessor of the Lanzhou Aluminum Plant, has been using self-baking tank technology to produce electrolytic aluminum since it was rebuilt and put into operation in 1966. In August 2002, after the 200,000-ampere-current 100,000-ton large pre-baked trough was put into operation, this backward production process did not completely exit the stage of history. In February of this year, according to the national environmental protection policy and the need to eliminate the backward production process of electrolytic aluminum and the needs of the company's future development, Lanzhou Aluminum Corporation began to phase out the production of self-baked cells in batches in a planned manner. It is understood that Lanzhou Aluminum stopped a total of 556 self-baking tanks, with an annual production capacity of 86,000 tons. After the production of all the self-baked electrolyzers of Lanzhou Aluminum Company ceased, the former plant will cooperate with China Quality Company to develop and produce new high-tech chemical products. The product structure will change accordingly, and the self-baked tanks in the new plant will be converted to 75 Qian'an's small pre-baked cells continue to produce electrolytic aluminum. Similarly, on August 4, the Zunyi Aluminum Plant in Guizhou, China, closed a 30,000-ton aluminum smelter due to excessive discharge of pollutants. The company closed the 10,000-tonne capacity of the smelter closer, and the remaining 20,000-tonne capacity was already shut down two years ago. At present, the smelter plans to upgrade, and the company also operates another aluminum smelter with an annual production capacity of 120,000 tons using environmentally friendly technology. However, because of the tight electricity supply, only half of the capacity of the smelter is in operation. Guizhou Zunyi Aluminum Plant stated that it expects this year's aluminum production to be 60,000 tons. Another aluminum manufacturer, Baotou Aluminum of China, said last week that it will close an aluminum plant with an annual capacity of 30,000 tons by the end of 2005. 2. Guanlu Aluminum will resume the production line with an annual output of 220,000 tons on September 30. Dow Jones Shanghai News: Shanxi Guanlu Company plans to resume the aluminum production line with an annual output of 220,000 tons on September 30. This will ensure Guan Aluminum’s aluminum output will reach 350,000 tons this year, which will be higher than the 2003 level. The production line was closed three months ago due to insufficient power supply. The company officials pointed out that they have decided to purchase electricity from Shanxi Province's power grid to restore the production of the production line. Since the Shanxi electricity price is basically the same as the local electricity price of the aluminum plant, the company's electricity production cost will not increase. According to Guan Aluminium's production forecast, Guanlv needs approximately 700,000 tons of alumina this year. The vast majority of alumina will be purchased from Chinalco. China's import and export volume of primary aluminum increased substantially in 3.6 months. The just-announced June import and export data released by the customs showed that the import and export volume of primary aluminum in the month was significantly higher than that in May. However, there was no significant increase in the net export of primary aluminum. In June, China imported 85,000 tons of primary aluminum, which was an increase of 26,000 tons from the previous month, an increase of 43%. In June, the export volume of primary aluminum was 108,000 tons, which was 33,000 tons more than in May, an increase of 44%. The balance of imports and exports, in June China's net export of 23,000 tons of primary aluminum, more than 8,000 tons exported in May. If the import and export of aluminum alloys are included, the imports of aluminum and aluminum alloys in June will be 112,000 tons, exports 136,000 tons, and net exports 24,000 tons, which is 10,000 tons more than last month, that is, aluminum. The number of imports and exports of alloys did not change much. In the first half of the year, China imported 540,000 tons of aluminum and alloys, an increase of 44.9% year-on-year; during the same period, exports were 627,000 tons, a year-on-year increase of 25.7%. The net export volume reached 87,000 tons. It should be said that the increase in exports in June was within our expectation, but a slight change in net exports is beyond our expectation. This is mainly due to the fact that import growth is not inferior. In fact, the prices of domestic and foreign markets remained at around 9 in June, and general trade imports were impossible. A large number of imports were made under the processing of incoming materials. As a result, it is difficult for us to judge the number of net exports in the second half of the year. It also explains why the pressure on the market has not eased as a result of a large increase in exports. Table 1 - July 2004 Import and Export of Aluminum and Related Products at a Glance Monthly Variety of Imports from January to July Accumulated Imports from the Same Period of the Previous Year + % Monthly Export Volume from January to July Export Volume Cumulative Year-on-Year +% Alumina 6 0 10000 -78.6 Un-wrought aluminium and aluminium alloys 31.5 29.75 Scrap aluminium 40 4. In the first half of the year, China’s import of aluminum strips increased by 20%. According to customs statistics, in the first half of 2004, China imported a total of 20.78 tons of aluminum sheet and strip, which was 20% higher than the same period of the previous year. Among them, the net import volume was 178,800 tons, and the export was 29,000 tons, which was a year-on-year increase of 11.6. %. Since 2000, the production of aluminum sheet and strip in our country has been developing rapidly and the output has continued to increase. In 2003, the total output of aluminum strips in the country reached 970,000 tons. In the first half of this year, China's aluminum sheet and strip production continued to maintain a strong growth momentum. However, from the perspective of the import and export situation in the first half of the year, the import volume still increased significantly, exceeding the number of exports during the same period. This shows that domestic demand for aluminum strips continues to be strong, but it also shows that domestic aluminum strip manufacturers still have much work to do to improve product quality and improve product quality, and the market has room for expansion. According to the newly released data from the National Bureau of Statistics, in July, China produced a total of 58,953 tons of aluminum alloys, an increase of 25% year-on-year. From January to July, the cumulative production of aluminum alloy nationwide was 411,731 tons, which also increased by 25% year-on-year. Shanghai Xinge Non-Ferrous Metals Co., Ltd. still ranks first in output, with a total production of 68,833 tons of aluminum alloy from January to July. 5. Alumina production and imports increased, prices rebounded slightly. According to data from the National Bureau of Statistics, China’s alumina production in the first seven months of the year was 4.032 million tons, an increase of 15.9% over the same period of last year, of which output in July was 614,000 tons. Last month increased by 7.7%. Among them, Chinalco’s output in the first seven months was 3.909 million tons, an increase of 14.89% over the same period of last year, and it has completed 60.14% of the annual plan. In addition to the year-on-year decline in the output of China Southern's subsidiaries in Shanxi Province, the output of the other branches has increased significantly. The largest increase was in the Guangxi branch. As of July, a total of 549,800 were produced. Tons, an increase of 93.3% over the same period of last year. The output of Pingdingshan Huiyuan Chemical Industry Co., Ltd. was 61,800 tons, that of Chongqing Bosai Mining (Group) Co., Ltd. was 24,900 tons, and that of the remaining 16 enterprises was 45,300 tons. At the same time, China imported 2.805 million tons of metallurgical grade alumina in the first half of this year, accounting for 98.5% of the total imported alumina. Among them, Minmetals Nonferrous Metals, Chinalco International Trade and Jiaozuo Wanfang imported the top three, while another 23 companies imported more than 20,000 tons. In July, Lianyungang received a total of 220,500 tons of unloaded alumina. From January to July, it imported 1.505 million tons. In July last year, Lianyungang imported 111,000 tons, which totaled 1.60 million tons. At present, the price of imported alumina car plates in Lianyungang is around 3,600 yuan/ton. With the rising prices of imported alumina CIF, prices have risen from the previous US$320/tonne to the current US$350/tonne, and domestic alumina prices at ports have also started to increase slightly, up by 50-80 points from the previous period. RMB/ton, the current price range is 3650-3680 USD/ton. It is understood that the rise in port prices reflects recent signs that demand has been warming. We have learned from media reports that some aluminum plants that already have production conditions may be supported by favorable factors such as falling alumina prices and rising aluminum prices. The timely start of new production capacity will create potential support for alumina prices. In addition, due to the continuous shortage of railway capacity and poor delivery, alumina inventory of some aluminum plants has fallen below the normal level, and the willingness to purchase has also supported prices. It is reported that at present, the country still strictly controls the processing of alumina feeds. After the export of old manuals is completed, if the follow-up exports cannot keep up, and the production of some new production capacity will undoubtedly increase the domestic supply, the aluminum price will be renewed. Constitute pressure will also affect the strength of alumina prices. 6. The approval of the Sichuan Qixing India Alumina joint venture project confirmed that the 1 million tons alumina project of Sichuan Qixing Aluminum Co., Ltd. in India has been approved by the National Development and Reform Commission and officially reported to the State Council. Although the project can obtain approval from the State Council and when it can be approved, it is still uncertain. However, this is another major event in the development of overseas alumina resources after the former China Nonferrous Metals Corporation and Chinalco Corporation. The total investment of the joint venture project is about 260 million U.S. dollars, which is a joint venture between Daystar and Indian Ashrapur Mining Company, initially negotiating a 50% stake. The annual output of alumina will be 500,000 tons, which will reach an annual output of 1 million tons. Sichuan Qixing Aluminum Industry Co., Ltd. currently has an electrolytic aluminum production capacity of 125,000 tons and is located in Meishan City, Sichuan Province. This move is expected to break Chinalco’s monopoly of domestic alumina. 6. North American aluminum output decline in July The new report released by the Aluminum Association of Canada shows that in July 2004, Canada’s primary aluminum output was approximately 21,160,000 tons compared to approximately 237,700 in July 2003. Ton. The Aluminum Association of Canada stated that in July this year, the annual production rate of primary aluminum was about 2,498,100 tons, which was a decrease of 6.9% from 2,638,600 tons in June and a decrease of 10.5% from 2,790,500 tons in July 2003. In July 2004, the United States produced 208,650 tons of primary aluminum, which was lower than the 204,445 tons in June and 226,047 tons in July 2003. The Aluminum Association said that in July, the annual production rate of primary aluminum in the United States was 2,463,416 tons, which was 2,661,521 tons in July 2003 and 2,494,229 tons in June of this year. In July, the average daily aluminum output of the United States was 6,731 tons, which was 6,815 tons in June and 7,292 tons in July 2003. 7. Tajikistan’s production of primary aluminum increased from January to July to 205,147 tons. Tajikistan’s primary aluminum output increased from January to July of this year to 205,147 tons compared with 175,910 in the same period last year. Tajikistan is a mountainous country and plans to increase aluminum production from 319,360 tons in 2003 to 347,900 tons this year. The country's aluminum smelter TadAZ is an aluminum producer in Central Asia. National aluminum production and export data for Tajikistan: January-July 2004 04-January 03 January-July Production (Unit: tons) 205,147 174,590 175,910 Exports (Unit: Million US Dollars) Not Available Provide 231.5 8. The Strike Impact Still Difficult to Resolve The six-week strike of Alcoa and the Becancour aluminum smelter in Quebec continues, as disputes over the contractual dispute remain largely divided. The strike forced the United States' larger primary aluminum producer - Alcoa had to close the three cell series of the Becancour smelter and reduce the annual production rate from 400,000 tons to 135,000 tons. Alcoa has announced a force majeure or delayed the contract with the customer. 9. European scrap aluminum prices have risen in recent weeks due to strong demand. In particular, strong demand from new EU member states has stimulated rising water prices. European scrap aluminum prices have risen in recent weeks. The high-grade aluminum scrap is about US$1,670 per ton of London Metal Exchange (LME) spot aluminium, which rises at US$72 (€60), which is a US$10 increase from June, and is up by US$30 from May. Traders said that consumers are saying that their orders are full and they are producing at full capacity. On May 1, 10 countries, including the Czech Republic, Poland, and Slovenia, joined the European Union, which has restricted the use of aluminum resources in the region. three. September Market Outlook Since August, Shanghai Aluminum has been singing all the way from August 15, 2010 to RMB 16,210 per ton on August 23. The 5-day MA, after wearing the 10-day MA on August 4th, broke through 10 days in a row, rising sharply after 20 days and after the 30-day moving average. However, after several unsuccessful breakthroughs in the 16200 mark, there are signs of falling back. Currently, the 5-day moving average has broken down above the 10th line, and the 30 antenna has already been flattening and has a downward trend. The pressure of the previous high on the current aluminum price is still quite large. The increase in Shanghai Aluminum and spot prices in the previous period was due to the shortage of spot products caused by the large number of domestic aluminum ingot exports. At the same time, the tension in railway transportation has caused regional imbalances in the spot supply of aluminum. From the perspective of the supply chain, the rebound in alumina prices shows that the increase in demand for aluminum plants means that the latter will be converted into electrolytic aluminum production. In terms of consumption, the impact of the state's macro-control on the construction industry has gradually increased in the second half of the year. Therefore, Shanghai Aluminum will fluctuate and decline in September, which will generate support near the industry cost of 15,600 yuan.