Financial Services Association, April 16 (Reporter Liang Xiangcai) Affected by factors such as the news that Rusal had been sanctioned, aluminum prices surged back into an “reverse V” trend. A number of industry insiders said in an interview with a reporter from the Financial Federation that the aluminum price of 20,000 yuan/ton may be a key support, and they are optimistic about the future long-term aluminum price.

Recently, aluminum prices have experienced a rare sharp fluctuation. Take Shanghai Aluminum's main company as an example. It once rose 3.3% in the intraday session yesterday, but today it fell 3.33% to close at 20165 yuan/ton. A relevant person from a listed aluminum company told reporters that the recent sharp fluctuation in aluminum prices was indeed not anticipated.

The price of aluminum has risen and fallen, but currently the price of over 20,000 yuan/ton is still near a two-year high. Some aluminum processing plants and traders told the Financial Federation reporter that although downstream customers have very low acceptance of the current aluminum price and basically just need to place an order, it is generally believed that the range of about 20,000 yuan/ton is the key support.

Several analysts told reporters that “in the short term, the 20,000 yuan/ton aluminum price has strong psychological support in the industry,” and “supply and demand at this price (20,000 yuan/ton) will stabilize a bit.”

While downstream is “worried” about high aluminum prices, midstream electrolytic aluminum companies are optimistic about the long-term trend of aluminum prices in the future.

The Financial Services Association reporter learned from China Aluminum (601600.SH) as an investor that after the overall rise in aluminum prices, the degree of downstream acceptance may decrease to a certain extent, but in the context of limited supply and ongoing demand, they are still optimistic about long-term prices.

At the performance briefing held by Aluminum China yesterday, Ge Xiaolei, the company's financial director and board secretary, said that demand in the electrolytic aluminum market has been stable recently, and social inventories of aluminum ingots have reached the lowest level in the same period in history. Domestic aluminum prices have risen due to the market's optimism about the consumer market potential of the aluminum industry and Western sanctions against Rusal, which spurred higher LME aluminum prices. At the same time, the cost side of the electrolytic aluminum industry is relatively stable, and the overall profit margin remains at a good level.

Li Hongwei, chairman of Shenhuo Co., Ltd. (000933.SZ), said at the performance conference held today that since domestic and foreign aluminum markets are in a slow growth supply environment, and the “ceiling” effect of China's electrolytic aluminum production capacity, it is unlikely that there will be a clear excess of electrolytic aluminum as consumption grows. The pattern of low inventory of aluminum ingots will continue. Overall, aluminum prices will be at a relatively good level in the future.

Li Hongwei also said that at the current price level, downstream customers make normal purchases, and the acceptance level is above average, and there is no significant inventory replenishment.

Regarding the reason for the current round of aluminum price fluctuations, Liu Peiyang, a senior researcher on nonferrous metals at Zhongyuan Futures, told the Financial Federation reporter that after the news that Rusal had been sanctioned, profits were concentrated on being realized. After the price quickly rose, long capital began to cut and leave the market; in addition, the Shanghai Futures Exchange cooled down the market by adjusting margin ratios, adjusting handling fees, and implementing transaction limits. There was a clear outflow of market capital this week, and prices followed the adjustments.

On April 12, the United States and the United Kingdom announced sanctions against Russia's non-ferrous metals, including aluminum, prohibiting the London Metal Exchange and the Chicago Mercantile Exchange from accepting new Russian metals. Russian aluminum, copper, and nickel produced on or after April 13 are all banned.

Influenced by this news, after the opening of the market on April 15, Lun Aluminum once rose more than 9%, and Shanghai Aluminum then rose more than 3%.

“It went up too much yesterday. I didn't have time to add a security deposit. After being knocked down, one BMW car (money loss) was gone. Let's look at today's trend. It's a double game of ice and fire.” At a time when aluminum prices are fluctuating greatly, some investors who have shorted aluminum prices lamented to reporters.

Looking ahead to the future market, Liu Peiyang believes that there has been no fundamental shift in macroeconomic logic support for improvement, and there are no real negative factors in the market. Therefore, the medium-term upward trend of aluminum has not yet come to an end.