Affected by environmental factors, some alumina production capacity in Shanxi is facing a shutdown, and nearly 5% of the national alumina production capacity will be directly affected, which is expected to promote alumina prices to continue to rise in the short and medium term. Recently, the price of electrolytic aluminium has also risen slowly. In the case of power, pre-baked anode and other cost lines, we judge that the performance or ring ratio of aluminium enterprises in the second quarter has increased significantly. The current rapid decline in inventory confirms that demand is strong. In the follow-up, we believe that consumption in the real estate sector will remain resilient. In the second half of the year, consumption in the electric power and automotive sectors is expected to increase marginally. Overall demand is expected to increase throughout the year. On the supply side, most of the newly added capacity lacks absolute cost advantage. The growth of supply may lag behind the change of demand. The overall profitability of the industry this year may be significantly improved compared with last year. In terms of target, we recently suggest that we pay attention to the target of high alumina self-sufficiency.

According to the Asian Metal Network, Shanxi Jiaokou sent a message that alumina was set up by the local government to rectify the leakage of red mud dam leachate due to its environmental protection. Affected by this problem, some alumina production capacity in Xiaoyi, Jiaokou and other areas of Shanxi Province is facing forced shutdown recently. According to Aladdin, 2.8 million tons of alumina are being phased out, and 400,000 tons of alumina have been shut down in Huaqing Aluminum Industry for overhaul. The total production capacity of 3.2 million tons of alumina has accounted for 4.5% of the total operation capacity of 71.26 million tons of alumina in China at the end of April. In addition, Xinfa Chemical (3.4 million tons), Xingan Chemical (2.8 million tons) and Jinzhong Hope (3 million tons) are also reducing alumina production to reduce red mud emissions. Overall, the number of affected capacity is on the high side. Alumina quotation goes up, generally rising 125-200 yuan, intentional quotation and turnover exceed 2900 yuan/ton.