In recent days, in the case of the overall rally in the sector, aluminum prices rose strongly, including prices once rose to a two-year high of 22040 yuan/ton. Why the performance of aluminum price “outshine”? What are the real policy implications? What is the impact of high aluminum prices on all links of the industrial chain?

The current contradiction between supply and demand in the electrolytic aluminum market is not prominent.” On the one hand, there are signs of a transition to the off-season at the consumer end. The new orders of terminal enterprises slowed down, the operating rate slowed down at the margin, and gradually transmitted to aluminum processing enterprises. However, the decline in the operating rate of aluminum processing enterprises is not obvious. On the other hand, from the supply side, in the case of the resumption of electrolytic aluminum production in Yunnan is still advancing, the local electrolytic aluminum production is still rising steadily, and the number of ingots cast by electrolytic aluminum plants has increased slightly recently. In terms of imports, although there is a theoretical import loss, but affected by European and American sanctions, Russian aluminum continues to flow into the country, so that imports remain high. At the same time, the recent increase in aluminum ingot inventories does not fall, which also reflects the poor fundamentals.
In the short term, he believes that the fundamentals do not have the power to push up aluminum prices, and policy has a greater impact on the current aluminum market sentiment. Once the impact of macro factors weakens, the market will return to the fundamentals, and the possibility of a pullback in aluminum prices is greater. In the later stage, it is still necessary to pay attention to domestic policy trends, and the fundamentals need to pay attention to the actual performance of consumption and inventory changes in the later stage.
The current aluminum price is at a high level, which also has an impact on all links of the industrial chain. With aluminum prices climbing to a two-year high, the profits of electrolytic aluminum enterprises are at a high level, which has a significant stimulus effect on the relevant capacity to be restored, but it also puts pressure on the downstream and terminal markets to increase costs.

Looking forward to the future market, foreign countries mainly observe the rhythm of the recovery of the manufacturing cycle in Europe and the United States, whether the Federal Reserve’s interest rate cut path is smooth, and domestic mainly observe whether the demand for real estate and infrastructure can gradually stabilize and rebound under the policy stimulus. In terms of fundamentals, it is concerned about the acceptance of high aluminum prices downstream. “Taken together, we judge that the upward cycle of aluminum prices may not yet be over.” However, the short-term rapid pull up the lack of fundamental support, the late aluminum price may have a certain degree of pullback, and this pullback is also necessary, will provide downstream stock opportunities

The sharp rise in aluminum prices has had a multifaceted impact on the can manufacturing industry. First, production costs have risen sharply, squeezing profit margins. Secondly, the supply chain may be strained, affecting the delivery of products and market supply.
However, the can manufacturing industry will not be easily defeated! They are actively taking the following measures:
1. Optimize production process: improve production efficiency and reduce costs
3. Cooperate with suppliers: ensure stable supply and reasonable price of raw materials.
4. Product innovation: Develop cans with higher added value.
5. Strengthen market research: Adjust production and sales strategies according to market changes.
Although the soaring price of aluminum brings challenges, it is also an opportunity for industry upgrading and transformation! Erjin Packaging is responding to challenges with a positive attitude and innovative thinking to meet the future!