April 2020 cable raw materials (aluminum) monthly report

First, the fundamentals

1.
According to data from the National Bureau of Statistics, the output of primary aluminum (electrolytic aluminum) in March was 2.
97 million tons, an increase of 2.
3% year-on-year; Total output from January to March was 8.
84 million tons, up 2.
7%
year-on-year.
Primary aluminium production averaged about 99,580 tonnes per day in March, down 1.
7% from 97,450 tonnes in the first two months of the year and the lowest daily production level since October, as the coronavirus pandemic dragged aluminium prices to a four-year low and smelters were forced to cut production
.

2.
Data show that alumina production in March was 5.
881 million tons, down 3.
6% year-on-year, and from January to March 2020, China's alumina output was 16.
93 million tons, down 7.
2%
year-on-year.

3.
Customs data show that China's exports of unwrought aluminum and aluminum products in March were 518,594 tons, compared with 669,208 tons
from January to February.
China's exports of unwrought aluminum and aluminum products in March were the highest since
May 2019.

4.
According to statistics released by the General Administration of Customs, China's alumina exports in March were 10,000 tons, an increase of 88.
2% year-on-year; The annual cumulative export of alumina was 30,000 tons, down 77.
7%
year-on-year.
China imported 338,653 tonnes of alumina in March, of which 159,770 tonnes came from Australia
.

5.
According to data released by the General Administration of Customs of China, China's scrap aluminum imports in March were 76,672 tons, down 39%
from the same period last year.
The gradual reduction of scrap aluminum approvals, coupled with the serious overseas epidemic, the import volume of scrap aluminum in March fell significantly
year-on-year.

Second, the market review

Shanghai aluminum rebound trend this month is more obvious, Shanghai aluminum index from the beginning of the month of 11265 yuan rebounded to 12700, nearly a month up as much as 13%, on the one hand, because the macro atmosphere tends to ease, spot source circulation is tight, domestic destocking range, on the other hand, because of the recent Yunnan, Gansu have successively issued notices of storage plans, Yunnan has determined to store 800,000 tons of non-ferrous metals, storage time is one year
.
Gansu Province also plans to store 436,000 tons of non-ferrous metal products
.
The bullish atmosphere in the market has boosted the rise
in domestic aluminum prices.

In terms of external market, the outbreak of the global epidemic, the circuit breaker of U.
S.
stocks, the collapse of crude oil, the first quarter of Lun aluminum basically walked in the decline, at the beginning of the month Lun aluminum continued to fall, the lowest down to 1455 US dollars, a new low since 2016, into April 9, the decline of London aluminum has slowed down significantly, stimulus measures in various countries to boost, alleviate the market downturn, Lun aluminum stopped falling and stabilized, and returned to above 1500 US dollars, the highest climbed to 1534 US dollars, the overall shock in the 1500-1540 range
。 In the short term, thanks to the strong domestic aluminum prices, Lun aluminum or continue to operate smoothly, but the new crown epidemic is still uncertain to the global economy, and the number of new people in overseas epidemics is still large, short-term demand is limited, and the continuous increase in Lun aluminum inventory is not conducive to the trend of Lun aluminum, it is expected that Lun aluminum will still maintain a low level of operation in May, focusing on the 1420-1580 range shock
.

Market: with the recovery of the market in April, downstream enterprises resumed work, market activity significantly increased compared with March, especially traders, due to price increases, frequent market operations, driving market transactions, spot prices are gradually firming, the current East China spot aluminum has risen by 70 yuan; Downstream enterprises mainly buy on demand at low prices, and market transactions are acceptable
.

East China: Affected by the epidemic in March aluminum prices fell sharply, but with the normal stimulation of the frequent, the market panic caused by the epidemic gradually subsided, coupled with electrolytic aluminum production reduction, storage and other favorable stimuli, this month ushered in a bottoming rebound, East China spot aluminum prices from the low of 11300 began to rebound, the center of gravity moved up significantly, as of April 30, East China spot aluminum prices have risen to 12780-12820 yuan / ton, up 1320 yuan / ton from the end of March, a monthly increase of 11.
5%.

South China: As of the end of April, the price of aluminum ingots in South China was between 13190-13290 yuan / ton, up 1440 yuan / ton from the end of March, an increase of 10.
9%; In mid-to-early April, the market in South China was well supplied, but the supply tightened in the middle and late months, the prices of cargo holders were firm, the spot premium continued to rise, and downstream enterprises feared the decline, maintaining a small amount of on-demand procurement
.

3.
Inventory

Since late March, LME aluminum inventories have increased significantly, suppressing prices significantly, and now Lun aluminum has returned to hovering
around 1500 again.
As of the end of April, LME aluminum stocks were 1.
347 million tons, an increase of nearly 200,000 tons from the end of March, and the overseas epidemic has not been controlled, and there is still a risk
of increasing short-term aluminum stocks.

Domestic Shanghai aluminum inventories showed a downward trend in April, giving up the gains in March; As of April 24, the total inventory of Shanghai aluminum was 458403 tons, down 69,669 tons
from the end of March.
Domestic electrolytic aluminum social inventory (including SHFE warehouse receipt): 158,000 tons in Shanghai, 52.
4 tons in Wuxi, 120,000 tons in Hangzhou, 81,000 tons in Gongyi, 246,000 tons in Nanhai, 54,000 tons in Tianjin, 8,000 tons in Linyi, 13,000 tons in Chongqing, and the total inventory of aluminum ingots in the place of consumption was 1.
204 million tons, down 155,000 tons
weekly.

Fourth, the waste market

The price of scrap aluminum rose in April, pulling back most of the decline in March, and South China expanded this month because the price fell in March beyond market expectations, and the current local aluminum wire price is around 11500, and the mainstream of machine aluminum is around 9200; At present, the price of aluminum alloy spraying new materials in East China is above 10,000, the aluminum wire is around 11,000, the price of cans is around 8300-8400, and pure cans can can be increased
.

With the rebound of prices, the enthusiasm of cargo holders has increased, and the market supply has increased compared with the scarcity in March, but the overall is still tight, and due to the strong willingness of holders to raise prices, the market has few
low-priced supplies.
In terms of recycled aluminum plants, manufacturers' inventories are generally low, more goods are in the market, and the demand for goods is stronger, and the price of recycled aluminum alloy ingots this month is relatively stagnatant, and the current price of ADC12 aluminum alloy ingots in East China is around
13300.
In terms of aluminum rods, due to tight supply, the processing fee of aluminum rods increased, once exceeded 1,000 yuan, and aluminum factories stopped accepting orders
.
The market lacks actual benefits, the cost of electrolytic aluminum has moved down significantly, it is recommended that merchants be cautious to chase higher, scrap aluminum holders should also reduce inventory, beware of falling prices after the holiday
.

5.
Market outlook

At present, the fundamentals of aluminum prices have not yet supported the sharp rise in aluminum prices, economic data decline, production profits recovery, aluminum plant production reduction willingness to decline, and downstream consumer terminals are still slowly repairing, although the two major sectors of real estate and automobiles in March and April have rebounded sharply month-on-month, but the year-on-year decline is still obvious
.
The epidemic situation abroad is severe, and export orders are still restricted
.
Short-term help from macro easing and storage and other benefits, there is a possibility of continuing to be strong, but the height of fear is limited, pay attention to the pressure level of the 13000 mark, beware of the risk of rushing back down, it is expected that the possibility of aluminum prices pulling back in May, the overall focus on the 12200-13000 range shock
.