Insiders pointed out that the direct purchase of electricity pilot job will lead to industry reshuffle, the industry average cost of aluminum prices will constitute a short-term pressure; However, as can not enjoy the "direct purchase of electricity" policy of small and medium enterprises will face the danger of being eliminated by the market, From the medium and long term, industry consolidation is conducive to ease the situation of excess capacity, prices are expected to accelerate bottom.

On Friday, on 15 electrolytic aluminum enterprises to carry out the direct power of the pilot work of the official news that the aluminum pressure. 9, the Shanghai aluminum futures fell sharply, the main 0906 contract fell 270 yuan, or 2.31%, to close at 11,435 yuan / ton, traded 10,7568 hands, a record amount of days since the contract listing.

The decrease in average cost constitutes pressure

Recently, the relevant departments issued a notice, for the domestic industrial policy, with direct electricity purchase conditions of 15 electrolytic aluminum enterprises to carry out direct purchase of electricity pilot work. The so-called large users direct purchase mode, that is, large users and power generation enterprises or independent power supply enterprises directly signed purchase and sales contracts, power purchase and sale of a special behavior.

Shun securities is expected in the implementation of direct power purchase policy, the local preferential tariff will be gradually cleaned up. In this way, consistent with the industrial policy of large and medium-sized aluminum prices will remain basically the same level; and can not enjoy the direct purchase policy of small and medium enterprises will face the danger of being cleared out of the market.

Analysts said that if there is no further purchasing behavior, the implementation of direct purchase of electricity will produce part of the shutdown of production capacity to restart, and further increase the short-term domestic supply surplus. While the industry average cost decline may make the current aluminum price shock interval down, weaken the direct purchase policy for electrolytic aluminum enterprises to create profit margins.

For a long time, due to higher prices, China's electrolytic aluminum production costs have been in the global high-end. Only due to labor and depreciation and other low-cost, which makes China's aluminum industry to survive. In the West, aluminum plants generally have long-term power supply agreements with local power plants. Prices are generally more than 30% lower than retail electricity prices.

According to British commodity research firm Brook Hunt forecast in 2009 the global electrolytic aluminum industry average production cost of 1,600 US dollars / ton. Shun Securities estimates that the average cost of China's aluminum industry is 1,750 US dollars / ton; This is 9.4% higher than the global average cost. As of 9, LME three-month aluminum price of 1305 US dollars / ton. In this aluminum price, the world more than 80% of the aluminum plant losses, while the Chinese aluminum industry is the industry-wide losses.

The domestic metal information institutions - CBI believes that the implementation of the direct purchase of electricity pilot to give the domestic electrolytic aluminum enterprises full time and space through the market's own regulatory function to complete the transformation of China's aluminum industry in the winter, but the industry average cost So that aluminum prices fell short-term pressure.

Price is expected to accelerate bottom

Industry sources said that if you can continue to promote, it will accelerate the elimination of backward production capacity, and promote technological transformation of enterprises and the pace of industrial restructuring, thereby significantly enhancing China's electrolytic aluminum industry's long-term competitiveness. Although some large enterprises to restart production capacity may be cut, but overall, the overall cut will be the main tone in 2009. In the medium and long term, this will help alleviate the situation of electrolytic aluminum supply overdraft, period prices to accelerate the bottom as possible.

Data show that since October last year, domestic electrolytic aluminum production began to decline; December production was only 945,000 tons, down 17.5%. China's annual electrolytic aluminum production is only 11.51 million tons / year, which is 18.1% lower than that of 14.06 million tons per year in September 2008, compared with the peak output of 14.06 million tons per year in September 2008. Shun Securities is expected, due to a larger rate of reduction, the current domestic aluminum production capacity utilization is only about 65%. If prices continue to slump and consumption is weak, in 2009 domestic electrolytic aluminum production is likely to be the first decline in more than 20 years.

"Consider the 'direct purchase of electricity' factors, due to weak prices and weak consumption, the short term the domestic electrolytic aluminum industry will also be difficult to get out of the dilemma.At present, our 2009 and 2010 domestic aluminum price assumptions were 12,000 yuan / ton and 13,500 yuan / Ton, "said Shun Heng, principal analyst of non-ferrous metals in Anxin Securities.