December 2020 cable raw materials (aluminum) monthly report

First, the fundamentals

1.
Data from the National Bureau of Statistics: China's primary aluminum (electrolytic aluminum) production in November was 3.
18 million tons, an increase of 8.
7% year-on-year, but a decrease of 0.
6%
from the record 3.
2 million tons in October, according to the Bureau of Statistics.
China's primary aluminium production in November was 106,000 tonnes per day, breaking the record high of 105,433 tonnes per day set in September
.

2.
Data show that the national alumina output in November 2020 was 6.
3 million tons, a year-on-year increase of 11.
3%.

From January to November 2020, the national alumina output was 67.
04 million tons, a year-on-year increase of 0.
5%.

3.
According to data from the General Administration of Customs, the export volume of unwrought aluminum and aluminum products in November 2020 was 424,000 tons, an increase of 1.
22% month-on-month and a year-on-year decrease of 6.
19%.

From January to November 2020, the cumulative export volume of unwrought aluminum and aluminum products was 4.
4039 million tons, down 16.
21%
from last year.

4.
China's alumina imports in November 2020 were 249,400 tons, an increase of 43.
17% month-on-month and 20.
60% year-on-year, compared with 206,800 tons in the same period last year; from January to November 2020, China's alumina imports reached 3,397,400 tons, a year-on-year increase of 172.
97%.

。 In addition, China's alumina exports in November 2020 were 0.
88 million tons, an increase of 282.
61% month-on-month and a year-on-year decrease of 17.
76%; China's net alumina imports in November were 240,700 tons, up 40.
02% month-on-month and 22.
74%
year-on-year.

5.
According to China Customs statistics, China's bauxite imports in November 2020 were about 8.
05 million tons, a slight increase of 0.
7% month-on-month and 12.
1%
year-on-year.
From January to November this year, bauxite imports totaled about 104 million tons, an increase of 13.
4%
over the same period last year.

6.
According to the latest data from the International Aluminum Association, in November 2020, the world's primary aluminum production was 5,471 thousand tons, a year-on-year increase of 4.
11%, and the average daily output was 182.
4 thousand tons; from January to November, the world's primary aluminum production accumulated 59,707 thousand tons, a year-on-year increase of 2.
56%.

Second, the market review

In December, Shanghai aluminum as a whole showed a trend of rushing back down, the main force rose to 16925 yuan / ton, almost broke the 17000 mark, the lowest fell to 15295 yuan / ton, as of the end of the month, closed at 15460, down 1025 from November, down 6.
22%; During the month, the aluminum price volatility was large, and under the gradual digestion of the previous favor, the upward trend of aluminum prices gradually weakened and failed to reach a new high; At the same time, with the foreign virus mutation and the news of sporadic cases in China, the market is once again in panic, coupled with the traditional off-season near the end of the year, the domestic inventory dematerialization has slowed down, the support of inventory on aluminum prices has gradually weakened, and the trend of aluminum prices has been weakening
.

Market: the market is unstable, traders fast forward and fast out operation, but because the consumption of downstream enterprises in December is not as good as in November, orders have declined, the demand for aluminum ingots has weakened, coupled with unstable market, sharp fluctuations, downstream receiving more cautious, dragging down some transactions, but also led to a significant slowdown in electrolytic aluminum destocking, and the overall market transaction was not as good as in
November.

East China: The decline in electrolytic aluminum inventories slowed down, weakened price support, coupled with the weakening of downstream consumption, repeated epidemics and other negative news suppressed, December aluminum prices failed to continue the previous month's rally, the center moved down, intraday from a high of 17,000 falls, has now fallen below 16,000; by the end of December, East China spot aluminum prices between 15,750-15,790 yuan / ton, down 1,000 yuan from the end of November, a decline of 6%.

South China: Foshan aluminum ingot prices fell in December, and the decline was more prominent, as of the end of December, the price of aluminum ingots with tickets was between 16100-16200 yuan / ton, down 1010 yuan / ton from the end of November, down 6%; In terms of market transactions, the South China market in December was less than last month, mainly due to the weak consumption of downstream enterprises and the excessive price fluctuations, with only more than one month left before the Spring Festival, and market demand may gradually weaken.

3.
Inventory

As of the end of December, LME aluminum stocks were 1366275 tons, down 7,750 tons, or 0.
56%, from the end of November, the decline slowed down significantly, weakening price support, coupled with the impact of negative factors such as the mutation of the new crown virus in the UK, Lun aluminum rebounded and showed a trend of rushing back down
.
As of December 25, the Shanghai aluminum inventory was 225277 tons, an increase of 4,904 tons, or 2.
23%,
compared with the end of November.

Fourth, the waste market

Although the price of aluminum ingots fell sharply in December, the performance of scrap aluminum was significantly better than expected, especially cans, machine aluminum, etc.
, affected by the sharp rise in downstream recycled aluminum alloy ingots, the price was raised, overall, the difference in scrap aluminum varieties in December was more obvious
.
At present, clean machine aluminum 12100 is around 10500, aluminum alloy spray coating is around 11600, and broken bridge material is around 10600 in East China
.

In terms of the market, the market fluctuated more sharply in December, the holders were more willing to cover goods in the first half of the year due to the better market, the price was repeatedly raised, the market supply was small, as the price declined, the price of the holder was difficult to sustain, the willingness to ship increased, and the shortage of market supply improved; In terms of downstream recycled aluminum plants, due to the sharp rise in the price of aluminum alloys, the shortage of raw materials in aluminum plants, the willingness to stock is high, and even the phenomenon of raising prices in the middle and early months has returned to normal, and because there is only more than 1 month left before the Spring Festival, manufacturers have a high stocking sentiment, especially medium and large enterprises, most have begun to stock, and the overall market transaction is
acceptable.

Boosted by manufacturers' demand for stocking, short-term scrap aluminum prices are still relatively firm, it is recommended that holders can hold a small amount of goods to rise, keep low inventory before the holiday, and downstream manufacturers can normally complete the stocking demand
.

5.
Market outlook

In December, Shanghai aluminum as a whole showed a trend of rushing back down, and aluminum prices fluctuated greatly
during the month.
Recently, China's new crown vaccine has been officially launched, coupled with the landing expectations of the US stimulus policy next week, short-term on the macro point of view or there is a trend of improvement, by which it boosted Shanghai aluminum also has a certain rebound possibility, but also still need to pay attention to domestic consumption and inventory changes, it is expected that the overall shock of aluminum prices in January is stable, short-term or slightly stronger may be, the main force below the focus on 15000 support, above the 16000 pressure level
.