August 2020 cable raw materials (aluminum) monthly report

First, the fundamentals

1.
According to data from the National Bureau of Statistics, China's output of ten non-ferrous metals in July was 5.
08 million tons, an increase of 3.
3% year-on-year; The output of ten non-ferrous metals from January to July was 34.
6 million tons, an increase of 3.
1%
over the same period last year.
China's primary aluminum production in July was 3.
1 million tons, up 3.
1% year-on-year; China's primary aluminum output from January to July was 21.
13 million tons, a year-on-year increase of 2.
5%.

2.
Data released by China's National Bureau of Statistics on Tuesday showed that China's alumina production in July was 6.
1 million tons, down 1.
6% year-on-year, and the cumulative output from January to July was 41.
283 million tons, down 5.
5%.

3.
According to data from the General Administration of Customs, China's exports of unwrought aluminum and aluminum products in July were 373,400 tons, an increase of 5.
48% from the previous month, and a decrease of 113,600 tons from July 2019, down 23.
33%
year-on-year.
China's exports of unwrought aluminum and aluminum products from January to July totaled 2.
7391 million tons, down 21.
11%
from 3.
472 million tons in January-July 2019.

4.
Customs data show that China's alumina exports in July 2020 were 02,500 tons, with a cumulative export of 100,000 tons from January to July; 417,300 tons of alumina was imported in July, and 2,327,200 tons were imported from January to July, an increase of 341.
2%
year-on-year.
The net import of alumina in June was 414,700 tons, and the cumulative net import from January to July was 2,284,800 tons
.

5.
Affected by the decline in sea freight, the price of imported bauxite continues to decline
.
The latest data shows that the price of imported bauxite is $46.
5/ton, which is already below the historical 25th percentile
.
At present, crude oil prices have stabilized and rebounded, and sea freight rates have also risen, and it is expected that the price of imported bauxite will not fall too much, and it may rise to more than
50 US dollars / ton in the second half of the year.

6.
Affected by the epidemic and the Spring Festival holiday, domestic electrolytic aluminum entered the accumulation stage in the first quarter, and the highest inventory rose to 1.
676 million tons
.
However, after entering the second quarter, the social inventory of electrolytic aluminum fell sharply, and the decline far exceeded expectations, and the current social inventory was only 699,000 tons, down 977,000 tons
from the highest value.

Second, the market review

After entering the off-season, the gradual decline in demand led to the overall weak operation of domestic fundamentals, and Shanghai aluminum continued to fluctuate during the month, the main force rose to 14985 yuan / ton, and as of the end of the month, the main force of Shanghai aluminum closed at 14540 yuan / ton, down 0.
99%
from July.

In the context of the continuous heating up of the global economic recovery, the center of gravity of London aluminum continued to move upward this month, and the intraday aluminum price once broke through the $1800 mark, the highest rose to $1806, and as of the end of the month, the overall was in the range of 1700-1800, up 5.
15% from July; At present, the latest stimulus measures of the Federal Reserve and favorable policies in various countries have boosted market confidence, and the macro situation is generally good, but the continuous rebound of the US dollar index may have a certain restraining effect on the continued upward movement of Lun Aluminum, and it is expected that the overall trend of London Aluminum in September is stable, or fluctuating
in the range of 1760-1860 US dollars.

In terms of the market, affected by the off-season in August, the demand of downstream enterprises is weak, and the decrease in orders has dragged down the demand for some aluminum ingots, while the cargo holders, because the downstream demand can not keep up, the price of the holders has difficulties, the premium has fallen significantly, and the current situation is basically in a flat water state, the overall market transaction is tepid, and it is expected to improve
in September.

East China, under the influence of the off-season, domestic electrolytic aluminum appeared accumulated inventory, the price positive weakened, coupled with the weak downstream orders dragged down, market confidence is insufficient, August aluminum prices overall declined, as of the end of August, East China spot aluminum prices in 14740-14780 yuan / ton, down 230 yuan
from the end of July.

In South China, as of August 31, the ticket price of aluminum ingots in South China was between 15030-15130 yuan / ton, down 160 yuan / ton from the end of July, slightly more resistant than East China; In terms of market transactions, the overall supply of goods in the South China market is relatively abundant, and downstream enterprises are affected by orders and prices, and most of them buy on demand, and the overall market transaction is average
.

3.
Inventory

Overseas demand is gradually recovering, and the continuous decline in Lun aluminum inventories in August supported the price of Lun aluminum higher, and once broke through the 1800 mark during the session
.
By the end of August, LME aluminum stocks were 1554375 tons, down 83,050 tons, or 5.
1%,
from the end of July.

Different from July, domestic Shanghai aluminum inventory showed an upward trend in August, climbing for four consecutive weeks, as of August 28, Shanghai inventory was 251037 tons, an increase of 29,218 tons from the end of July, an increase of 13.
2%.

Domestic electrolytic aluminum social inventory (including SHFE warehouse receipt): Shanghai 120,000 tons, Wuxi 24.
1 tons, Hangzhou 81,000 tons, Gongyi 82,000 tons, Nanhai 175,000 tons, Tianjin 53,000 tons, Linyi 06,000 tons, Chongqing 03,000 tons, consumption area aluminum ingot inventory total 761,000 tons
.

Fourth, the waste market

In August, the price of aluminum ingots failed to continue the upward trend in July, and there was a decline, and the price of scrap aluminum followed the decline, the range was mostly 50-100 yuan, and a very small number of varieties were more resistant to decline; At present, the price of aluminum alloy spray coating in East China is about 10700, the broken bridge is around 9800, the price of cans is around 8700, and the 1 series aluminum scrap is still about 85% off, and the overall performance is stable and slightly lower
than the end of July.

In August, the difference between scrap aluminum varieties is still more obvious, scrap aluminum alloy type materials and aluminum wire are more popular, and the holders mostly say that the price is relatively firm, the profit is acceptable, the demand of aluminum rod and aluminum profile manufacturers is large, and the procurement is more active; The price of cans and raw aluminum is still stagnating, the market is basically stable, mainly affected by the price of recycled aluminum alloy ingots, manufacturers due to downstream products and orders, receipt of more low prices; It is understood that under the traditional consumption season of "Golden Nine Silver Ten", although the current corporate orders have not improved significantly, most of them have expectations for the future market, the willingness to stock is high, and the overall market transaction is
acceptable.
Under the expectation of peak season demand, after the decline in the market, the short-term decline is expected to slow down, the price of scrap aluminum has resisted the decline obviously, and the room for further decline is not large
.

5.
Market outlook

Since entering the off-season in August, the domestic social aluminum ingot inventory has continued to be in a slightly accumulated state, and the high smelting profit has also promoted aluminum enterprises to accelerate the release of production capacity, the overall performance of domestic fundamentals under weak supply and demand is not good, and the aluminum price shock is weak; However, on the whole, with the gradual arrival of the peak season, the market's expectation of demand recovery still exists, and the subsequent social treasury is expected to change from accumulation to destocking again, it is expected that in September, aluminum prices in the early stage or there is a slight adjustment demand, the later rise is more likely, it is recommended to continue to pay attention to the recovery of downstream demand and the transformation of the social treasury, Shanghai aluminum main focus on 1.
42-15,200 range oscillation
.