February 2021 cable raw materials (aluminum) monthly report

First, the fundamentals

1.
According to data from the International Aluminum Association, global primary aluminum production in January 2021 was 5.
701 million tons, an increase of 0.
23% month-on-month and 4.
29%
year-on-year.
In 2020, global primary aluminum production totaled 65.
296 million tons, a year-on-year increase of 2.
57%.

Among them, China's primary aluminum production in January was 3.
3 million tons, unchanged from the previous month, an increase of 6.
9% year-on-year; Primary aluminum production in the Gulf Cooperation Council (GCC) countries in January was 494,000 tons, down 0.
60% month-on-month and 0.
80% year-on-year; Primary aluminum production in Asia (excluding China) in January was 376,000 tons, up 3.
01% month-on-month and 6.
52%
year-on-year.

2.
Data show that China's alumina production in January 2021 was 6.
139 million tons, up 8.
1% year-on-year, with an average daily output of 198,000 tons, an increase of 07,100 tons from the daily output of 190,900 tons in December 2020.

It is expected that the overall daily output of China's alumina industry in February 2021 will increase slightly compared with January, and monthly output will show a downward trend, and domestic alumina production is expected to be about 5.
7 million tons in February.

3.
According to data released by the General Administration of Customs, the annual export volume of unwrought aluminum and aluminum products in 2020 was 4,857,434.
8 tons, down 15.
2%
from 5,726,131.
7 tons in 2019.
Export data for January 2021 has not yet been released
.

4.
Customs data show that in 2020, the cumulative export of alumina was 154,600 tons, and the cumulative import was 3.
8059 million tons, an increase of 131.
32%
year-on-year.
Import and export data for January 2021 has not yet been released
.

5.
Yun Aluminum Co.
, Ltd.
released the 2020 performance forecast showing that during the reporting period, the company's net profit was about 89,000 yuan, an increase of about
80% over the same period last year.
During the reporting period, the new crown pneumonia epidemic spread around the world, the aluminum product market was affected to a certain extent, with the domestic epidemic under control, the resumption of work and production was fully promoted, since June the price of aluminum products stabilized and rebounded, the annual Yangtze River aluminum ingot, Nanchu aluminum ingot spot prices were 14,190 yuan / ton, 14,226 yuan / ton, respectively increased by 1.
77% and 1.
92%
compared with the same period in 2019.

6.
According to reports, in 2020, Egypt's aluminum and copper exports increased by 5.
3% to reach 748 million US dollars, and in 2019, the export value was 710 million US dollars
.
In 2020, exports to Algeria, Italy, Turkey, Morocco, Greece, Libya, Sudan, Germany, Lebanon and Spain accounted for 70.
4% of Egypt's total copper and aluminum exports, reaching US$527 million
.
According to data from the Construction Materials, Refractory and Metallurgical Industry Export Council, in 2020, Egypt's aluminum exports increased by 7% to 575 million US dollars, compared with 539 million US dollars in the same period of 2019, with a total of aluminum products exported to 65 countries and regions, of which exports to Italy reached 286 million US dollars, accounting for 49.
65%
of the total aluminum exports.

Second, the market review

In February, the aluminum market ushered in a wave of soaring market, the main force of Shanghai aluminum rose more than 2,000 yuan in the month, the highest rose to 17,695 yuan / ton, a new high in nearly 10 years, as of the end of the month, the main 2104 contract of Shanghai aluminum closed at 17465, up 2460 from January, an increase of 16.
4%.

In terms of the market, although the price of aluminum has repeatedly reached new highs, as the market price continues to rise, some people who have not stocked before the holiday still purchase high prices and buy on demand; Most of those with inventory are showing a wait-and-see situation
.
Judging from the feedback of manufacturers, the current overall order is acceptable
.
Macro favors and demand can still push up aluminum prices
.

In East China, macro benefits exceeded expectations, coupled with the background of a phased gap between supply and demand, amplified the attractiveness of funds, and then promoted the acceleration of aluminum prices
.
As of February 26, the average spot aluminum price in East China was reported at 17270 yuan / ton, up 2300 yuan / ton since February, an increase of 15.
37%; A new high
in nearly 10 years.

In South China, as of the end of the month, the price of aluminum ingots in South China was between 17490-17590 yuan / ton, up 2350 yuan / ton from the end of January, an increase of 15.
47%; In terms of the spot market, due to the Spring Festival in February, the transaction performance of the South China market was cold, and due to the sharp rise in prices, the wait-and-see atmosphere of downstream enterprises after the holiday was heavier, which dragged down market transactions
.

3.
Inventory

Since February 10, the Shanghai Stock Exchange aluminum inventory has continued its growth trend, mainly due to the traditional domestic Spring Festival holiday factors, market consumption weakened, resulting in an increase
in inventory.
As of February 19, the total inventory of aluminum ingots on the Shanghai Exchange was 304,500 tons, an increase of 64,500 tons, or 26.
87%,
from the beginning of February.
As of February 25, the domestic social aluminum ingot inventory reached 1.
082 million tons, an increase of 469,000 tons from the beginning of January, an increase of 76%; Among them, the growth trend of social aluminum ingot inventory in Shanghai is not obvious, with a total inventory of 84,000 tons, down 10,000 tons from the beginning of January; Wuxi and Nanhai social aluminum ingot inventory increased significantly, Wuxi's total inventory was 410,000 tons, an increase of 187,000 tons or 83.
8% from the beginning of January; Nanhai aluminum ingot stocks were 248,000 tons, up 119,000 tons, or 92%,
from the beginning of January.

Since February, the inventory of London aluminum has continued to decline, as of February 25, the total inventory of London aluminum reached 1.
3325 million tons, down 98,500 tons, or 6.
88%,
from a high of 1.
431 million tons in early February.
Falling inventories helped strengthen the price of Lun aluminum
.
In addition, the market recovery after the epidemic is expected to continue the trend
of destocking in the short term.
After the holiday, as the market gradually starts working, it is expected that the aluminum ingot inventory of the Shanghai Exchange in March is expected to be destocked
.
At the same time, low inventories are also one of the
factors supporting the strengthening of aluminum prices.

Fourth, the waste market

In February, the price of scrap aluminum rose sharply, especially after the holiday, the price increased significantly, South China rose around 1500 yuan, some varieties rose close to 2000 yuan, the current local aluminum line around 14,900, 63 old materials about 13200; other regions have also risen sharply, the current mainstream price of cans in East China has risen to around 11500, aluminum wire around 14400, spraying net material around 12700, the increase is outstanding
.

Although the price of scrap aluminum rose sharply in February, due to the impact of the Spring Festival factor, the company was on holiday, and the actual market transaction weakened, although most manufacturers and freight yards have started construction, but due to the scarcity of market circulation, the transaction has not yet recovered; It is understood that due to the impact of the epidemic in the Spring Festival in 2020, the market fell sharply, and the hoarding merchants suffered serious losses, and there were generally not many stockpiles this year, and the shortage of short-term scrap aluminum market was difficult to improve
.

The market bullish atmosphere is strong, short-term scrap aluminum in the supply of tight support, scrap aluminum prices are still strong, but with the gradual rise of the market, chasing the risk of increase, it is recommended that the goods merchants can appropriately reduce inventory, a small amount of goods are the mainstay
.

5.
Market outlook

This month, Shanghai aluminum ushered in a wave of soaring prices, the main force hit a new high in nearly 10 years, with a monthly increase of 16.
4%.

Since the holiday, the early landing of the US fiscal stimulus policy and the Fed's continuous emphasis on easing policy have greatly encouraged the market, and macro sentiment has continued to improve; Fundamentals, the accumulation around the Spring Festival was less than expected, and at the same time, affected by the control of energy consumption in Inner Mongolia in the middle of the week, the Mengdong smelter was forced to partially reduce production, and both ends of supply and demand were supported, and aluminum prices continued to rise
.
Overall, the short-term macro benefits still have strong support for aluminum prices, while in the medium and long term, the production capacity of aluminum enterprises may expand under the promotion of high profits, and aluminum prices still have a certain risk of pullback; It is expected that the aluminum price in March may be adjusted at an appropriate high level, but the overall or still at a high level, the main focus is on the fluctuation
of the 17000-18000 range.