What factor impacts aluminum price most
After a sharp rise in prices in the first quarter, aluminum prices have plunged in the past two months. Aluminum prices are affected by a number of factors. Here are the main factors of aluminum price change according to relative news.
(1) Supply and demand
The production of aluminum is constrained by technology, equipment and resources. If the production growth is slow, technological breakthroughs or the discovery of new aluminum ores may bring about substantial growth, affecting supply and demand.
Inventory is another important factor. Increase or decrease of enterprises inventory, the government's reserve strategy will affect the stability of the aluminum market.
Import and export volume in the domestic supply and demand accounts for a certain proportion. Besides, exchange rate changes or the reasons causing import and export volume changes will also affect the supply and demand of aluminum.
Vicious competition, price war, demand growth and price increases etc. will also affect the supply and demand relationship of aluminum, and thus affect the price. Policy regulation, regarding to such as environmental protection, production capacity, export and othes, may have an important impact on the supply and demand relationship in the aluminum market.
(2) the supply of alumina
The cost of alumina accounts for about 28%-34% of the cost of aluminum ingot production, so the supply amount and price of alumina directly affect the price of aluminum ingot.
The international alumina market is highly concentrated and most of the world's alumina is sold through long-term contracts, resulting in a small amount of alumina available for sale in the spot market. The growing demand for alumina and the increase in the amount of imported alumina have also directly promoted the rise in international alumina prices.
(3) the price of Electricity
The electrolytic aluminum industry has a great demand for electricity, so the fluctuation of electricity price has a great impact on the production cost of aluminum.
The average electricity consumption per ton of aluminum in China is about 14,000 KW•h/t. Small fluctuations in electricity price will have a great impact on the production cost of electrolytic aluminum. For example, when electricity costs exceed 30% of the cost of aluminum production, it may be considered dangerous production.
Global economic situation Aluminum consumption is highly related to the economy, in the rapid development of the economy, aluminum consumption will also appear synchronous growth; On the contrary, a recession would lead to a sharp decline in aluminum consumption. In addition, aluminum related gold price fluctuations, international oil price fluctuations, industrial policy changes in various countries will have an impact on aluminum prices.
In the global economic situation, aluminum consumption is highly correlated with the economy. In the rapid development of the economy, aluminum consumption will also appear growth in step. On the contrary, recession will lead to a sharp decline in aluminum consumption.
(4) Import and export duties and exchange rates
Changes in import and export tariffs and exchange rates have an important impact on aluminum prices. For example, China's alumina import tariff adjustment will change the domestic supply and demand relationship and affect the international market price. Aluminum trade is usually priced and settled in dollars, so what dollar does and the exchange rate will also affect aluminum prices.
(5) The changing trend of application
The Change in the use of aluminum in automotive manufacturing, construction engineering, wire and cable industries will also have a great influence of the price. With the development and change of these industries, the application of aluminum has been changing, which will also affect the price of aluminum.
(6) Improvement and innovation of Aluminum production process
Improvement and innovations in aluminum production processes can also affect aluminum prices. For example, the application of computer technology in the aluminum electrolysis industry has promoted the research of the physical field and the establishment of mathematical models in the electrolytic process, which has made the electrolytic cell design better and the electric capacity increased, thus help reduce the production cost.
In summary, aluminum prices are affected by a variety of factors such as production and consumption, economic conditions, import and export tariffs, exchange rates, changes in application trends, as well as improvements and innovations in aluminum production processes. These factors interact and jointly determine the trend of aluminum prices.
(1) Supply and demand
The production of aluminum is constrained by technology, equipment and resources. If the production growth is slow, technological breakthroughs or the discovery of new aluminum ores may bring about substantial growth, affecting supply and demand.
Inventory is another important factor. Increase or decrease of enterprises inventory, the government's reserve strategy will affect the stability of the aluminum market.
Import and export volume in the domestic supply and demand accounts for a certain proportion. Besides, exchange rate changes or the reasons causing import and export volume changes will also affect the supply and demand of aluminum.
Vicious competition, price war, demand growth and price increases etc. will also affect the supply and demand relationship of aluminum, and thus affect the price. Policy regulation, regarding to such as environmental protection, production capacity, export and othes, may have an important impact on the supply and demand relationship in the aluminum market.
(2) the supply of alumina
The cost of alumina accounts for about 28%-34% of the cost of aluminum ingot production, so the supply amount and price of alumina directly affect the price of aluminum ingot.
The international alumina market is highly concentrated and most of the world's alumina is sold through long-term contracts, resulting in a small amount of alumina available for sale in the spot market. The growing demand for alumina and the increase in the amount of imported alumina have also directly promoted the rise in international alumina prices.
(3) the price of Electricity
The electrolytic aluminum industry has a great demand for electricity, so the fluctuation of electricity price has a great impact on the production cost of aluminum.
The average electricity consumption per ton of aluminum in China is about 14,000 KW•h/t. Small fluctuations in electricity price will have a great impact on the production cost of electrolytic aluminum. For example, when electricity costs exceed 30% of the cost of aluminum production, it may be considered dangerous production.
Global economic situation Aluminum consumption is highly related to the economy, in the rapid development of the economy, aluminum consumption will also appear synchronous growth; On the contrary, a recession would lead to a sharp decline in aluminum consumption. In addition, aluminum related gold price fluctuations, international oil price fluctuations, industrial policy changes in various countries will have an impact on aluminum prices.
In the global economic situation, aluminum consumption is highly correlated with the economy. In the rapid development of the economy, aluminum consumption will also appear growth in step. On the contrary, recession will lead to a sharp decline in aluminum consumption.
(4) Import and export duties and exchange rates
Changes in import and export tariffs and exchange rates have an important impact on aluminum prices. For example, China's alumina import tariff adjustment will change the domestic supply and demand relationship and affect the international market price. Aluminum trade is usually priced and settled in dollars, so what dollar does and the exchange rate will also affect aluminum prices.
(5) The changing trend of application
The Change in the use of aluminum in automotive manufacturing, construction engineering, wire and cable industries will also have a great influence of the price. With the development and change of these industries, the application of aluminum has been changing, which will also affect the price of aluminum.
(6) Improvement and innovation of Aluminum production process
Improvement and innovations in aluminum production processes can also affect aluminum prices. For example, the application of computer technology in the aluminum electrolysis industry has promoted the research of the physical field and the establishment of mathematical models in the electrolytic process, which has made the electrolytic cell design better and the electric capacity increased, thus help reduce the production cost.
In summary, aluminum prices are affected by a variety of factors such as production and consumption, economic conditions, import and export tariffs, exchange rates, changes in application trends, as well as improvements and innovations in aluminum production processes. These factors interact and jointly determine the trend of aluminum prices.
