Aluminium prices have fluctuated wildly recently, and market sentiment has dominated stock price fluctuations. After the market closed on March 11, news about Rusal came out one after another. First, after the United Kingdom announced that the president of Rusal was added to the sanctions list, the increase in LME aluminium prices subsequently expanded to 5.8%. It is worth noting that the target of sanctions is the company president rather than Rusal itself. The former has a significantly weaker impact on the fundamentals of aluminium. It remains to be seen whether Rusal will be included in the scope of sanctions in the future.
In addition, a considerable number of companies said they were seeking to stop bauxite shipments to a key Rusal plant, which could lead to a short-term supply-demand mismatch for Rusal's upstream production. The short-term driving force of aluminium prices comes from overseas, that is, assuming that natural gas and Rusal are sanctioned, the market expects a shortage of natural gas and primary aluminium supply in Europe, but this expectation has been traded for a period of time, and there is limited room for further speculation.
In China, Aluminium companies are lucrative and continue to resume production and volume, especially in Yunnan, where there is an accelerated production resumption. It is true that there is a shortage of overseas aluminium ingots, but China's current domestic supply is sufficient, and high aluminium prices have suppressed the downstream demand for foreign demand, which has made Shanghai Aluminium's performance consistently inferior to Lun Aluminium. In the short term, Shanghai Aluminium may still have room for adjustment under the fluctuating mood, but it may not fall further. From a long-term perspective, in China's domestic area, the post-cycle of real estate is superimposed on infrastructure development, and domestic demand in peak seasons can still be expected. With the weakening of internal and external price ratios, export profitability will expand, and aluminium exports may be booming.
