August 2019 cable raw materials (aluminum) monthly report

First, the fundamentals

1.
According to data released by the National Bureau of Statistics, China's electrolytic aluminum (primary aluminum) output in July 2019 was 2.
98 million tons, an increase of 0.
34% month-on-month and a year-on-year decrease of 2%; The output of electrolytic aluminum from January to July was 20.
49 million tons, an increase of 1.
6%
year-on-year.
The month-on-month increase in production in July was mainly due to the continuous decline in alumina prices at the cost end, and the recovery of corporate profits was more obvious, which stimulated the enthusiasm of
enterprises to produce.

2.
According to data from the National Bureau of Statistics, the national output of alumina in July 2019 was 6.
222 million tons, a year-on-year increase of 2.
9%; From January to July, the cumulative output of alumina in China was 43.
879 million tons, a year-on-year increase of 6.
2%.

Alumina production in July fell by 188,000 tons month-on-month, mainly due to the continued decline in alumina prices, low enthusiasm for production and production of enterprises, and some enterprises reduced production
.

3.
Customs data show that China's exports of unwrought aluminum and aluminum products totaled 487,000 tons in July, down 6.
2% from the same period last year; From January to July 2019, China exported 3.
468 million tons of unwrought aluminum and aluminum products, an increase of 7.
2%
year-on-year.
Exports of unwrought aluminum and aluminum products fell for two consecutive months in July, mainly due to the impact of narrowing export profits in the previous period
.

4.
Customs data show that China exported 4,416 tons of alumina in July, down 95.
8% year-on-year; From January to July, the cumulative export was 185234 tons, down 46%
year-on-year.
In July, 200,000 tons of alumina were imported, a year-on-year increase of 3286%; From January to July, the cumulative import was 520,000 tons, a year-on-year increase of 44.
8%.

5.
Customs data show that the amount of aluminum scrap imported in July fell to 143,000 tons, down 21.
5% from the previous month, a decrease of 39,000 tons
.
An increase of 17.
9% year-on-year, an increase of 21,000 tons
.
The sharp drop in scrap imports in July was mainly due to the impact of
the import ban.

Second, the market review

This month's Shanghai aluminum main trend performance is strong, Shandong due to typhoon transportation blocked, the market on supply concerns continue to ferment, aluminum prices rebounded, but Shandong just passed, Xinjiang aluminum enterprise and leakage furnace explosion, accidents followed, aluminum prices ushered in waves of rebound market; Boosted by the news, aluminum prices changed the sluggish market, Shanghai aluminum main intraday breakthrough of 14,000 mark, the highest climbed to 14,455 yuan / ton, a new high since October 11, 2018, as the news speculation gradually faded, aluminum prices returned to the shock market, from a fundamental point of view, alumina prices stopped falling and stabilized to form a certain support for aluminum prices, and in September traditional consumption season, the market hopes for demand expectations, so strong selling prices, but from the demand side, this year will still be in the peak season is not strong, And the macro expectation is still inhibiting the trend of aluminum prices, and it is expected that aluminum prices will not rise sharply in September and continue to maintain a volatile trend
.

In terms of the external market, this month Lun aluminum shock declined, at the beginning of the month Sino-US trade relations continued to deteriorate, the news was short, so that Lun aluminum trend weak, intraday all the way down, fell below the 1800 mark, back to the "17 era", obviously the pressure of the 1800 mark remains, and then boosted by the rebound of surrounding metals, Lun aluminum stopped falling steadily, but global economic worries remain, and the Sino-US trade war is getting hotter and hotter, Lun aluminum again fluctuated and fell, near the end of the month, Lun aluminum lowest to 1743 US dollars, a new low since January 12, 2017, down 3.
9% from the end of July; From the trend point of view, macro uncertainty still has a negative impact on aluminum prices, but it is hoped that in the September consumption season, aluminum prices have limited room to fall, and Lun aluminum materials in September first fluctuated and then stabilized
.

In terms of the market, due to the rise in aluminum prices in August, traders operate more frequently, holders mainly ship at high prices, spot basically maintains a slight premium, the overall supply of the market is still relatively abundant, downstream enterprises suffer from weak orders and high prices in the off-season, the stock volume is relatively limited, mostly maintain on-demand buying, and the overall transaction is average
.
It is expected that with the arrival of the peak season in September, transactions may improve
.

East China, due to the typhoon hit by Shandong, causing the market to worry about supply, and a leakage furnace explosion in an aluminum plant in Xinjiang stopped about 500,000 tons of electrolytic aluminum production capacity emergencies, aluminum prices in August ushered in a wave of rebound market, East China spot aluminum stood at 14,000 in one fell swoop, and then affected by the Sino-US trade war, fell into a volatile market again; as of the end of August, East China spot aluminum prices were between 14270-14310 yuan / ton, up 380 yuan
from the end of July.

In South China, as of August 30, the price of aluminum ingot tickets in South China was between 14560-14660 yuan / ton, up 420 yuan from the end of July, and the increase was larger than that in East China; Although August was in the off-season, the market began to hope for consumption in September, and enterprises reported an increase in orders
.

3.
Inventory

As of August 28, the total inventory of London aluminum was 936225 tons, down 92,650 tons, or 9%, from the end of July; September is about to usher in the peak consumption season, and the trend of aluminum destocking continues
.
As of August 23, the total inventory of aluminum on the Shanghai Exchange was 379,000 tons, down 17,400 tons, or 4.
39%, from the end of July; The trend of destocking is obvious, which makes aluminum prices slightly firm; Domestic social stocks, as of the end of July, Shanghai area 194,000 tons, Wuxi area 309,000 tons, Hangzhou area 53,000 tons, Gongyi area 105,000 tons, South China Sea area 287,000 tons, Tianjin 53,000 tons, Linyi 12,000 tons, Chongqing 20,000 tons, consumption area aluminum ingot inventory total 1.
033 million tons
.

Fourth, the waste market

In August, the price of scrap aluminum followed the price of aluminum to rise significantly, especially in South China, more followed by about 200 yuan, the current clean machine aluminum price is around 10,000, aluminum wire price around 12400, up more than 300 yuan from the end of July; Other regions rose slightly inferior, only around 100 yuan, especially machine aluminum and cans relatively stagnation, the current East China machine aluminum mainstream receipt price is around 9600-9700, cans around 8500-8600, and 1-6 series scraps and aluminum wire, aluminum profiles and other high-grade source prices are more obvious, 1 series mainstream prices have risen above 12,000
.

In terms of market transactions, in August, the scrap aluminum market due to the high temperature and low price in the early stage, the overall performance of the market source is small, especially the source of 1 and 6 series scraps, aluminum profiles, the willingness of the holders to raise the price is stronger, some manufacturers due to shortage or even raise the price to receive goods, it is understood that the price of aluminum wire received by a factory in Jiangxi once reached 12800 yuan / ton; The enthusiasm of recycled aluminum alloy ingot manufacturers to receive goods has improved significantly compared with July, especially in the middle and late months, due to the lack of market goods and manufacturers' hopes for the peak season in September, the number of receiving manufacturers entering the market has increased, and the receipt price has also been adjusted, and the overall transaction is better than July
.

The peak season is coming, the willingness of enterprises to stock up is enhanced, and the scrap aluminum market is tightly supported, short-term scrap aluminum prices are still prone to rise and fall market, anti-fall attributes are more obvious, or the performance is stable and small rise, downstream demand manufacturers still maintain normal inventory
.

5.
Market outlook

This month's Shanghai aluminum main trend performance is strong, from the demand side, this year will still be in the peak season is not strong, and macro expectations are still short still inhibiting the trend of aluminum prices, it is expected that in September aluminum prices are difficult to rise sharply, continue to maintain a volatile trend, Shanghai aluminum main force temporarily pay attention to the 14,000 mark support, if it stands, the overall fluctuation range is fluctuating in the range of 1.
4-14,500;
The peak season is approaching, spot prices may still be firm, but due to the lack of actual benefits, Sino-US trade relations are unstable, the upward momentum or insufficient, East China spot aluminum concern range of 1.
4-14,400 in September, bargain bargain can be
bought on demand.