Sihaiwang: the price of aluminum has risen more than 25% since Russia was sanctioned. In this round of soaring aluminum prices, the long camp is full of big and small winners. Among them, Paul Tudor Jones, a hedge fund tycoon who had been ambushed for more than two years, once again made a lot of money from gambling. After the feast, how many opportunities are left for the Bulls?
Aluminum market fattens Wall Street vultures
Since the US blacklisted Rusal, the world's second-largest aluminum producer, on April 6, LME aluminum prices have risen from US $2010 / ton to US $2517 / ton yesterday, up 25.2%.
Who is the trading star behind this round of price increase?
Paul Tudor Jone, a big hedge fund man, may be one of them, sources said. He was rated by CNBC as the living trader next to George M. Soros. In the global stock market crash in October 1987, his Tudor futures fund gained 62% return against the market.
This year, the Wall Street master once again showed his sharp investment vision when everyone was drunk and I woke up alone. It is reported that since 2016, Paul Tudor Jone and a trader jointly held by the bulk commodity giant (Castleton commodities International) have bought and hoarded spot aluminum from the international market for two consecutive years, betting on tight supply and demand in the aluminum market. Just the year before, aluminum prices fell to a six-year low.
With the news of US sanctions against Rusal company landing and fermenting, the expectation of aluminum supply tightening has been rising again and again. As the world's second largest aluminum producer, Rusal, which was blacklisted in the sanctions list, has a total global alumina production capacity of 13.19 million tons / year and an operating capacity of 11.2 million tons / year as of April 2018, according to the latest data of a domestic consulting agency. After the implementation of the above-mentioned sanctions, not only LME and Comex announced that they would not accept Rusal after the time of sanctions, but also the cooperation relationship between large international traders such as Glencore and Rio Tinto and Rusal was interrupted.
Wang Rong, a futures analyst at Guotai Junan (Hong Kong stock 02611), explained that according to the regional distribution of Rusal's overseas sales in 2017, the total sales of raw aluminum and secondary aluminum products to North America and Europe were 1714000 tons, accounting for 53.8% of Rusal's total overseas sales, 924000 tons to Asia, 29.0% and 551000 tons to the Middle East, 17.3%. Based on Rusal's sales volume of 3.955 million tons of raw aluminum and alloy in 2017, the number of raw aluminum and alloy sold to the United States, Europe, Japan and South Korea will be about 2.476 million tons. Even if we make a 3 / 4 Conversion (considering that the sales in the first quarter have been completed), this means that if the overseas market continues to restrict the use of Rusal products, the potential supply reduction in the overseas market in the next three quarters will be around 1857000 tons. This figure is undoubtedly astonishing for the ten digit overseas market of supply shortage scale in the past few years. Wang Rong said.
In this context, the U.S. market aluminum price has risen more than 15% against the price of Lun aluminum futures, and the trader's value has also risen.
The trader held 500000 tonnes of aluminium at most, with a total value of about $1.5 billion at current prices, the report said. The aluminum is stored in the open air at a Mississippi River Bay warehouse outside New Orleans, Louisiana, in the south. And half of the aluminium it has hoarded in the past two years has found a home.