[chinalco.com] CNBC reported on August 10 that GAURAV Sodhi, an intelligent investor resource analyst, believes that after the mainland's producers cut production sharply and the supply and demand of the overall aluminum industry readjusted, the aluminum market, which has been short for a long time, will also reach a turning point in the future. After the London Metal Exchange (LME) hit a low of $1677 per ton in February this year, it has risen 20% in total, showing what the market thinks is a long market signal, and the recent price has stabilized at a near 17 month high of more than $2000 per ton.

India's emkay Global Financial Services Ltd. reported that the price of aluminum and zinc is expected to remain at the current level, saying LME's inventory of aluminum and zinc is basically the same in the near future. Sodhi pointed out that the continuous growth of aluminum production in the past few years has been an important factor in depressing aluminum prices, but this situation has changed this year. Since the end of last year, the mainland has cut 2 million tons of aluminum production capacity.

On the other hand, producers outside the mainland continued to reduce production, with Rusal (0486. HK), the world's largest aluminium producer, reducing production by 2% in the first quarter. J.P. Morgan predicted that the aluminum market would be short of 439000 tons this year, reversing the situation that the surplus exceeded 2 million tons during the financial crisis, while the Reuters survey predicted that the aluminum market would be over 444000 tons this year.

Dominic Schneider, head of commodity research at UBS, said most of the rise in aluminum prices was over, saying that we should not only pay attention to LME aluminum prices, but also pay attention to the premium of aluminum; plus the premium, the current aluminum price is about $2400 per ton, which is enough to stimulate producers to increase production.

According to Bloomberg, the delivery price of spot aluminum in European Rotterdam warehouse is LME spot price plus US $380 per ton, the premium level has reached a record high, nearly doubling from US $200 in the same period last year. Observers believe that although LME aluminum inventory is huge, the spot supply in the market is scarce, because most of LME inventory is locked in financing transactions, so consumer enterprises must pay a higher premium to purchase aluminum.