April 2022 cable raw materials (aluminum) monthly report

First, the fundamentals

1.
According to the latest data from the National Bureau of Statistics, China's output of ten non-ferrous metals in March 2022 increased by 3.
1% year-on-year to 5.
64 million tons, and the total output of ten non-ferrous metals from January to March increased by 0.
9% year-on-year to 16.
17 million tons
.
Among them: primary aluminum (electrolytic aluminum) production in March increased by 1.
8% year-on-year to 3.
3 million tons, and the total primary aluminum production from January to March decreased by 0.
4% year-on-year to 9.
63 million tons
.
By the end of March, Yunnan's electrolytic aluminum production capacity had released nearly eighty percent, and the output of electrolytic aluminum in March was 377,000 tons, an increase of 43.
6%
month-on-month.

2.
According to data from the National Bureau of Statistics, China's alumina output in March 2022 was 6.
853 million tons, a year-on-year increase of 4.
5%; The cumulative output from January to March was 18.
624 million tons, down 3.
5%
year-on-year.
In March 2022, the national production of alumina in the month increased year-on-year, and the cumulative output decreased
year-on-year.

3.
According to data from the General Administration of Customs, China's exports of unwrought aluminum and aluminum products in March 2022 were 594,360.
9 tons, a year-on-year increase of 34%.

From January to March, the export volume of unwrought aluminum and aluminum products was 1,628,336.
2 tons, a year-on-year increase of 26.
7%.

In March 2022, China's imports of unwrought aluminum and aluminum products were 197134 tons, with a year-on-year growth rate of -4.
6%.

4.
According to data from the General Administration of Customs, China's imports of alumina (alumina, except artificial corundum) in March were 189,088.
13 tons, down 6.
04% month-on-month and 29.
50%
year-on-year.
Among them, Australia is the largest supplier, importing 178946.
60 tons from the country in the month, an increase of 184.
04% month-on-month and 13.
65%
year-on-year.
China's alumina exports in March were 10,000 tons, an increase of 187.
6% year-on-year; The annual cumulative export of alumina was 20,000 tons, down 8.
9%
year-on-year.

5.
After a sharp correction in the fourth quarter of 2021, domestic aluminum prices rose again to a high level in the first quarter of 2022, and the profitability of enterprises in related industries continued to improve
.
As of April 26, 16 of the 19 listed companies in Wind CITIC Tier 1 aluminum industry that have disclosed a quarterly report have achieved year-on-year growth, of which 8 have doubled their net profits
.

Second, the market review

This month, aluminum prices showed a high downward trend, Shanghai aluminum fell below the 21,000 mark, the lowest down to 20,295 yuan / ton, the main force still has strong support at 20,000; As of the end of the month, the cumulative decline reached 8.
05%; With the expected slowdown in global economic growth coupled with the implementation of the Federal Reserve and central banks to tighten policies, macro sentiment is mostly weak, but the recent easing of the domestic epidemic has pushed up the recovery of consumption to a certain extent, and it is expected that next month's aluminum prices or performance will first fall and then rise
.

This month, the price of London aluminum continued to decline, and by the end of the month, the cumulative decline exceeded $400, a decline of 12.
8%; During the month, due to multiple factors such as the epidemic, war and high inflation, the global economic growth slowed down, and the IMF also sharply lowered the economic growth forecasts of various countries, which hit market sentiment hard.
At the same time, the Fed released a signal to raise interest rates in May, and said that it may maintain monetary tightening policy during the year, and Lun Aluminum is under obvious pressure; Recently, the GDP of the United States in the first quarter recorded the first contraction since 2020, and the market's concerns about the economic downturn have deepened again, in the short term, considering the instability caused by the Russia-Ukraine conflict and the suppression of the market by the Fed's interest rate hike, Lun Aluminum may continue to operate
weakly.

In terms of the market, East China was seriously affected by the epidemic in April, and the demand for "Silver Fourth" was disappointed, due to regional control and other factors, some downstream enterprises reported that shipments and purchases were blocked, and the order demand was not in a hurry, coupled with the unstable price of aluminum ingots, downstream enterprises just needed to receive goods at the bottom; There are many market disturbances, traders are also less active, and the overall market transaction does not reflect the peak season trading performance
.

In East China, the conflict between Russia and Ukraine intensified, European energy crisis concerns still disturbed market sentiment, and the domestic market, the outbreak of the epidemic in many places, market transportation was hindered to a certain extent, coupled with some downstream enterprises encountered control and shutdown, market demand weakened, the overall performance of aluminum prices in April first rose and then fell, intraday volatility was more severe
.
As of April 29, the spot aluminum price in East China was between 20,790-20,830 yuan / ton, down 1,820 yuan / ton from the end of March, a decline of 8%.

South China, macro and fundamental bearish, South China aluminum ingot rushed back down in April, as of the end of the month, the price of aluminum ingot tickets was between 21100-21200 yuan / ton, down 1780 yuan / ton from the end of March, down 7.
8%; The South China market is less affected by the epidemic, and the transaction is significantly better than that in East China, and the enthusiasm of downstream enterprises to enter the market is acceptable
.

3.
Inventory

LME aluminum inventories continued to maintain a downward trend in April 2022, and as of April 28, LME aluminum inventories were 571625 tons, down 75,225 tons, or 11.
69%, from the end of March, slowing down from March; The decline in LME aluminum inventories is difficult to offset the negative impact caused by macro disturbances, and the overall price of London aluminum in April still showed a volatile downward trend
.

In April 2022, the decline rate of Shanghai aluminum inventory slowed down, and as of April 29, Shanghai aluminum inventory was 290141 tons, down 15,664 tons, or 5.
12%, from the beginning of the month; In addition, it is understood that as of April 28, the inventory of electrolytic aluminum in 8 mainstream consumption areas in China was about 987,000 tons, returning to less than
1 million tons.

Fourth, the waste market

In April, the price of scrap aluminum followed the sharp decline of aluminum ingots, and the price of the East China market was intensified due to the shortage of goods, and the decline was more than 500-800 yuan, at present, the mainstream of local aluminum alloy spraying old materials is around 16500, around the broken bridge 15100, around the cans 14400, around the aluminum wire 18600; The decline in other regions has expanded, especially in the southwest and south China, some varieties have fallen by more than 1,000 yuan, aluminum wire and aluminum alloy have fallen prominently, and cans are relatively resistant
.

In terms of the market, in April, the East China market was difficult to find a car, the freight was high, the shortage of scrap aluminum in the market intensified, the cost of recycled aluminum manufacturers increased, and it was difficult to replenish storage; Other regions have also suffered from external factors to varying degrees
.
It is understood that in mid-to-late April, due to the maintenance of the China Resources natural gas pipeline, all the local aluminum enterprises using its natural gas stopped production and work, and the same raw materials have also been suspended; The shutdown was maintained for about
a week.
Henan Changge Dazhou Town notified the rural line transformation, replacement of high-voltage lines, etc.
, to the village as the village, some basic power outages in about 2-3 days, most enterprises have been sent to electricity, large factories have generators, the actual output has little impact
.
However, some companies have also reported that there is no power supply at present, and production is
being stopped.

Shanghai's current round of epidemic may be further controlled in the first half of May, and the receiving environment of recycled aluminum enterprises in various places will also be greatly improved, and the market supply is expected to continue to rise, and the backlog of orders of aluminum enterprises in the early stage will also be released centrally, market demand will increase, and it is expected that the price of scrap aluminum after the holiday may stop falling and pick up
.

5.
Market outlook

As far as the short-term market is concerned, considering that the Fed's interest rate hike is imminent, market uncertainties have surged, and the short-term market can wait and see for risk aversion and wait for the interest rate hike to land; The domestic focus is still on the impact of the epidemic on transportation, if the epidemic eases transportation, the suppressed demand in the early stage of the downstream will be released more smoothly, and the social treasury can also see a more obvious decomposition
.
After the digestion of the follow-up bearish news, based on the logic of post-epidemic demand release, coupled with overseas is still in a continuous shortage pattern, it is expected that aluminum prices may still recover in May, and Shanghai aluminum mainly focuses on the shock range of 20000-21500
.