To further improve production capacity
At present, China's electrolytic aluminum compliance capacity is around 36 million -37 million tons, and the illegal production capacity of Al is about 9 million -1000 million tons. According to the Chinese government regulations that it will take reform on the electrolytic aluminum supply. This reform will be complete the final supervision and rectification around October 15. This nearly 21% of the illegal production capacity will be shut down.
Winter environmental protection is limited or exceeded
In order to improve the quality of the air environment in the north, China introduced the winter heating season electrolytic aluminum plant limited and there will be more than 30% aluminum production cut-down.
The global supply gap continues to expand
2017 global demand for primary aluminum is expected to grow 4% -5%. China is the world's largest consumer of aluminum. From the supply side, although the current domestic supply has small aluminum surplus, the overall situation in short supply inthe overseas market for recent years. The With the implementation of the domestic supply side reform, the forced shutdown of illegal production will make the output significantly reduced, the domestic supply surplus situation will be improved quickly, and the global supply gap will be further enlarged. But this will also drive the growth of LME aluminum prices.
In short, in the electrolytic aluminum supply side of the reform policy support, aluminum prices will remain strong pattern, electrolytic aluminum prices are currently in the mid-up trend. In the October 15 supervision and rectification deadline, aluminum price is expected to 20% higher than recent aluminum price. In the end of this winter in the limited production and environmental protection and other factors, aluminum price is expected to 33% higher than recent aluminum price.
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