February 2022 cable raw materials (aluminum) monthly report

First, the market review

Recently, the center of gravity of domestic and foreign aluminum prices is still in an upward trend
.
Shanghai aluminum's main force has risen by 12.
4% since the beginning of the year, and spot prices have also risen
sharply following futures prices.
According to the monitoring data of the cable network (): in February 2022, the price of Yangtze River spot A00 aluminum ingots fluctuated and rose, with an average price of 22270 yuan / ton at the beginning of the month, and reached the highest point of 23290 yuan / ton within the month (February 10), after which the price slightly corrected, but basically hovered
at a high level.
As of February 25, the average price of Yangtze River spot A00 aluminum ingots was 22,820 yuan / ton, and the price rose by 550 yuan / ton, an increase of about 2.
5%.

On the macro front, the Russia-Ukraine conflict has intensified, which has increased market risk aversion in the short term
.
Russia is a major supplier of natural gas to Europe, if Europe follows the United States to increase sanctions, or will lose this part of the source, then Europe's energy shortage will further aggravate, energy costs will continue to be high, aluminum production capacity may
be further reduced.
In this context, the global aluminum supply chain will be affected, and it is difficult for global aluminum prices to experience a deep correction
in the short term.

On the supply side, since the end of last year, the recovery of domestic electrolytic aluminum production capacity has been relatively slow, and many manufacturers have reduced production
to varying degrees.
February coincided with the Beijing Winter Olympics, during which there was no new plan to resume production of electrolytic aluminum plants in various places, and electrolytic aluminum production was affected, in addition, the outbreak of the epidemic in Baise in Guangxi Province had a great impact
on the production and transportation of local alumina and electrolytic aluminum.
The epidemic in Bose has aggravated the tight supply situation in the electrolytic aluminum market and has become the fuse for the rise in aluminum prices
.

On the demand side, the steady growth of the domestic economy is still the theme in 2022, and as the downstream gradually resumes work and production, infrastructure investment will play a positive role
in the downstream consumption of aluminum.
In addition, as the traditional downstream consumption of aluminum, real estate, automobile industry accounts for about 45%, under the current circumstances, although the downstream investment and demand prospects represented by real estate are still uncertain, but with the implementation of new energy vehicles, the demand for aluminum will still increase significantly
.

3.
Inventory

At the end of January, global aluminum explicit stocks were 1176948 tons, down 116313 tons from the end of December 2021, of which LME aluminum stocks were 939,000 tons, a 14-year low, and as of February 24, LME aluminum stocks fell to 824,000 tons, and international aluminum supply remained tight
.

Domestically, at the end of January, the previous period of aluminum inventory decreased by 40,866 tons to 282703 tons, refreshing the lowest level in nearly three months, in the first week after the holiday, China's electrolytic aluminum social inventory was 1.
039 million tons, an increase of 90,000 tons week-on-week, the scale of accumulation was lower than the same period of previous years, according to the traditional accumulation season, by the end of February, the domestic electrolytic aluminum social inventory accumulation or reached 110-1.
2 million tons
.
Overall, global exchange inventories are declining, and the current global aluminum market supply shortage continues, and it is expected that the overall inventory will continue to remain low in the short term, forming a strong support
for aluminum prices.

Fourth, the market outlook

Under the background of stable domestic economic growth, infrastructure investment is expected to play a positive role in aluminum downstream consumption, and the market remains optimistic
about future market demand.
Abroad, the outbreak of the Russian-Ukrainian war, the news is endless, market sentiment fluctuates, risk aversion gradually deepens, and it is recommended to pay attention to the attitude of Europe and the United States to Russia and the content of possible sanctions
.
In terms of fundamental supply and demand, the overall recovery of domestic production capacity is slow, and the epidemic in some regions such as Guangxi has aggravated the tight supply situation in the electrolytic aluminum market, which has become the fuse for the rise in aluminum prices
.
In addition, inventories at home and abroad are at a low level, and European energy prices remain high, aluminum prices may continue to be strongly supported
.
In summary, it is expected that aluminum prices will remain high and volatile in the short term, and it is necessary to pay attention to the potential impact
of the development of the situation in Russia and Ukraine on the global aluminum market in the short term.