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Aluminum is a light metal. Its compounds are widely distributed in nature. Aluminum and aluminum alloys are currently widely used and one of the most economical and applicable materials. The world's aluminum output has surpassed the copper output since 1956 and has always been the first in non-ferrous metals. The current production and consumption of aluminum (in tons) is second only to steel, becoming the second largest metal for human applications

The price of aluminum ingot is the same as that of other metals, and the price is volatile. The main reasons that affect futures prices are:

1. Supply and demand

The supply and demand relationship directly affects the market pricing of a commodity. When the market supply and demand relationship is temporarily balanced, the market price of the commodity will fluctuate in a narrow range; when the supply and demand relationship is in imbalance, the price will fluctuate significantly. In the aluminum futures market, investors can pay attention to an indicator that reflects the change in the relationship between aluminum supply and demand-inventory.

2. Supply of alumina

The cost of alumina accounts for about 28% -34% of the production cost of aluminum ingots. Due to the high concentration of the international alumina market, most of the world's alumina (80% to 90%) is sold through long-term contracts, so there are very few aluminas available for sale in the spot market. In recent years, the continuous expansion of China's electrolytic aluminum production has led to a growing domestic demand for alumina. At present, about two-thirds of imported alumina needs to be purchased from the spot market. China's large purchase of alumina in the international market has directly contributed to the sharp rise in international alumina prices.

3. The impact of electricity prices

The electrolytic aluminum industry is also known as the "electric tiger" industry. At present, the average power consumption of tons of aluminum at domestic and foreign aluminum plants is controlled below 15,000 kwh / t. Experience in the production of aluminum ingots in Western countries shows that when electricity costs exceed 30% of the cost of aluminum production, it is considered a dangerous production.

As China is an energy-deficient country, several increases in electricity prices have increased the average electricity price of aluminum companies to more than 0.355 yuan / KWh, which is nearly 4 cents / KWh higher than in 2003, which means that the production cost of aluminum companies per ton of aluminum has increased by 600 yuan. Therefore, the power factor not only affects China's electrolytic aluminum production, but also affects the domestic and international aluminum market prices.

4. Impact of the economic situation

Aluminium has become an important non-ferrous metal species. Especially in developed countries or regions, the consumption of aluminum has been highly related to economic development. When a country or region's economy is developing rapidly, aluminum consumption will also increase simultaneously. Similarly, the economic downturn will lead to a decline in aluminum consumption in some industries, which in turn will lead to fluctuations in aluminum prices.

5. The impact of changes in aluminum application trends

Changes in the use and volume of aluminum ingots in major industries such as automobile manufacturing, construction engineering, wire and cable will have a significant impact on the price of aluminum.