Research On Electrolytic Aluminium Price Influencing Factors And Countermeasures

The application prospect of electrolytic aluminium products is quite promising.In the long term,this may be benefited by their performance features such as light weight and corrosion resistance;thus the future requirements for aluminum still have space to grow.Factors such as the development tendency of lightweight cars,the extensive application of electrolytic aluminium products in construction industry and the upgrade of China's manufacturing industry all can increase the usage amount of electrolytic aluminium.At the “demand” end,the per capita aluminum consumption of China still have larger space to grow compared to that of developed countries in Europe and America.The Development Plan for the Non-ferrous Metal Industry(2016-2020)predicts that China's annual amounts of electrolytic aluminium consumption in 2020 will reach 40 million ton and the annual compound growth rate will be 5.2%.However,at the “supply” end,the Chinese government explicitly requests to intensify efforts to control the expansion of production capacity,give priority to reducing overcapacity of electrolytic aluminium;in addition,new and reconstruction projects are stipulated to strictly implement policy requirements of equal capacity or reduced capacity replacement;in this way,the capacity at the “supply” end will be distinctly restricted.For the electrolytic aluminium,its conditions of supply and demand also need to return back to their equilibrium state.As an intermediate link of electrolytic aluminium's trade flows domain,the trade companies have connected preceding electrolytic aluminium manufacturing enterprises and the following electrolytic aluminium processing enterprises in all regions.Under the current situation where trading volumes of electrolytic aluminium are constantly increasing,how trade companies conduct rational and feasible interest arbitrage and accomplish risk management and control at the same time will lay a solid foundation for their smooth operation.Based on prices of electrolytic aluminium,this paper focused on co-integration relationship and causality between the forward price of Shanghai aluminium and the spot price of electrolytic aluminium to analyze and research price influencing factors of electrolytic aluminium.Firstly,this paper summarized domestic and overseas literature reviews related to price influencing factors of electrolytic aluminium,interest arbitrage and risk control and gave a brief introduction to the electrolytic aluminium industry chain.Secondly,it analyzed above influencing factors from aspects of the “production cost” end,forward price and industry policies and summarized that the price of aluminium oxide in production costs could exert great influences on that of electrolytic aluminium;moreover,the forward price is also a critical factor for the electrolytic aluminium price formation.Then it adopted OXMETRICS to conduct the stationary test toward obtained data and conducted the co-integration relationship and Granger causality examination toward interrelations of both segmented parts.Finally,based on the influence degree of electrolytic aluminium and enterprises' practical situation,this paper took SYJ Company as an example to control the risk caused by trade companies using basis arbitrage and the best hedging ratio to accomplish rational hedging operations.At the end of this paper,the obtained conclusion was systematically concluded and summarized;from practical application perspective,this paper also offered preliminary suggestions for electrolytic aluminium trading enterprises to utilize industry policies,market environment,aluminium oxide's price,inventory status and futures conditions to conduct arbitrage and hedging operations.It is sincerely hoped that these enterprises can utilize relevant instruments in financial market,furthest avoid transferable risks and ultimately realize their stable and rapid development.