July 2019 cable raw materials (aluminum) monthly report

First, the fundamentals

1.
According to data from the Bureau of Statistics, China's primary aluminum (electrolytic aluminum) production in June 2019 was 2.
97 million tons, basically the same as in May, but an increase of 1.
3% year-on-year, especially in the first half of 2019, the data shows that the cumulative output of primary aluminum from January to June was 17.
41 million tons, a year-on-year increase of 2.
2%.

The downward shift in the cost of electrolytic aluminum smelting was the main reason why
the output of electrolytic aluminum remained high in June.

2.
According to data from the National Bureau of Statistics, China's alumina production in June increased by 5.
4% year-on-year to 6.
41 million tons
.
It is understood that the production loss caused by the suspension of production that began in May was the most obvious in June, but it was precisely at the peak of the market in June, and the increase in the output of new investment and resumption enterprises mostly made up for the loss
of production.

3.
Customs data show that China's exports of unwrought aluminum and aluminum products in June 2019 were 506,000 tons, down 30,000 tons from May and 0.
8%
year-on-year.
From January to June 2019, the cumulative export of unwrought aluminum and aluminum products was 2.
982 million tons, an increase of 10%
year-on-year.

4.
Customs data show that China's alumina imports in June were 50,000 tons, an increase of 4.
6% over the same period last year, and in the first half of this year, China's alumina imports were 320,000 tons, down 9.
5%
from the same period last year.
In terms of exports, the change was more obvious, with alumina exports of 3,757 tons in June, almost down from 7,536 tons in May
.

5.
According to customs data statistics, China's scrap aluminum imports in June 2019 were 180,000 tons, a year-on-year increase of 66.
2%, and also increased month-on-month; The import value was 252.
991 million US dollars
.
From January to June 2019, the total import volume of scrap aluminum reached about
840,000 tons.
Imports continued to grow in June, mainly because some scrap imports will be restricted
from July 1.

Second, the market review

This month, the trend of the Shanghai aluminum index is relatively calm, the overall trend shows a narrow range of shock market, consumer demand slows down, destocking stagnation, alumina prices fall sharply, cost support weakens, so that Shanghai aluminum upward momentum is insufficient.
This month's Shanghai aluminum index overall volatility in the range of 1.
36-14,000, the overall rise and fall space is not large, from the trend point of view, the market is in the consumption off-season, demand is weak, and the news is flat, aluminum prices rise weakly, Shanghai aluminum 14,000 pressure remains, August is still in the consumption off-season, aluminum price shock trend is difficult to see better, and macro uncertainty, the overall weak pattern is expected to remain unchanged, temporarily pay attention to the 1.
36-14,000 range shock trend; more wait and see
.

In terms of the external market, this month Lun aluminum first rose and then fell, in the first half of the month due to the easing of Sino-US relations, the United States said that it would no longer impose new tariffs on China, macro news is positive, so that Lun aluminum shock rises, and the Fed interest rate cut expectations to lower the dollar, Lun aluminum intraday breakthrough 1800 mark, the highest climb to 1866 US dollars, obviously lack of substantial positive boost, macro uncertainties, and the dollar continues to rise, Lun aluminum ended 5 consecutive weeks of continuous rise, the second half of the month Lun aluminum high fell, intraday again lost the 1800 mark , as of the end of the month, the lowest down to $1787, from the trend point of view, the overall trend of Lun aluminum is still weak, the pressure of the 1800 mark remains, but in view of falling below this threshold, the decline space is limited, so it is expected that the August Lun aluminum shock pattern will not change, pay attention to the 1750-1830 range shock market
.

In terms of market transactions, the supply of electrolytic aluminum market in July was still abundant, and with the decline in costs, corporate profits recovered, supply pressure increased, traders mostly maintained fast forward and fast out operations, and spot goods basically remained in flat water; Due to the restrictions on orders in the off-season, the enthusiasm for entering the market has decreased, which has dragged down market transactions
.

East China: 7 cost end alumina prices have fallen, the current price in East China has fallen to 2480, a drop of nearly 400 yuan, bringing greater bearishness to the price of electrolytic aluminum; Coupled with the influence of off-season consumption, the aluminum price in July is still running below 14,000, and the overall performance first rose and then fell, giving up most of the gains; as of July 31, the spot aluminum price in East China was 13890-13930 yuan / ton, up 90 yuan / ton
from the end of June.

South China: As of July 31, the price of aluminum ingot tickets in South China was between 14140-14240 yuan / ton, a slight increase of 20 yuan from the end of June, the increase was obviously inferior to East China, mainly due to the reduction of orders from local aluminum profile enterprises in South China, resulting in weak market demand, which can be seen from the accumulation of electrolytic aluminum stocks in the South China Sea in July, it is understood that the local electrolytic aluminum inventory in July increased by 43,000 tons
.

3.
Inventory

This month's inventory has rebounded from June, and as of July 31, the total LME aluminum inventory reached 1.
029 million tons, an increase of about 3.
23%
from 1 million tons at the end of June 。 As of July 26, the total inventory of aluminum on the Shanghai Exchange was 396,000 tons, down 26,700 tons, or 6.
3%, from the end of June; The trend of destocking is obvious, which makes aluminum prices slightly firm; Domestic social stocks, as of the end of July, Shanghai area 199,000 tons, Wuxi area 305,000 tons, Hangzhou area 62,000 tons, Gongyi area 107,000 tons, South China Sea area 274,000 tons, Tianjin 53,000 tons, Linyi 16,000 tons, Chongqing 24,000 tons, consumption area aluminum ingot inventory total 1.
04 million tons, down from the end of June
.

Fourth, the waste market

In July, the price of scrap aluminum was suppressed more seriously, continuing the decline in June, but the decline was relatively slowed down, as of the end of the month, South China fell steadily, the range was about 50 yuan, and the mainstream price of clean machine aluminum was around 9900; At present, the mainstream receipt price of aluminum alloy spraying old materials in East China is around 10100-10200, broken bridge material is around 9200, aluminum wire is around 11800, cans are around 8500, and motorcycle wheels are around
10500.

In terms of market transactions, prices continued to fall, the market was sluggish, and the phenomenon of cargo holders covering goods, coupled with environmental protection inspections, hot weather and other impacts, the source of scrap aluminum was significantly tightened compared with June, and the market circulation was reduced; Among them, 1-6 series scraps, aluminum doors and windows and other resources are still relatively popular, aluminum rod and aluminum profile factories maintain normal stocks, and the price is relatively firm; The price of cans and miscellaneous aluminum is still seriously suppressed, the enthusiasm of recycled aluminum manufacturers to receive goods is not high, and the price of recycled aluminum alloy ingots has fallen endlessly, the profits of manufacturers have been affected, and the operating rate is generally low
.

Under the influence of off-season demand and high temperature weather, the short-term transaction of scrap aluminum market is difficult to improve, but considering that the current market supply is tight, there are many cargo holders covering goods, and the expected decline is also limited, scrap aluminum short-term materials are still stagnation and resistance, the fluctuation space is not large, and the market is stable
.

5.
Market outlook

This month's aluminum price trend is relatively calm, the overall show a narrow range of shock market, consumer demand slowdown, destocking stagnation, alumina prices fell sharply, cost support weakened, so that aluminum prices rise momentum is insufficient, August is still in the consumption off-season, aluminum price shock trend is difficult to improve, and macro uncertainty, the overall weak pattern is expected unchanged
.
Spot aluminum prices were sluggish as trade relations between China and the United States reached another stalemate, risk aversion in the market, and weak economic data weakened the outlook for metal demand
.
In the off-season of consumption, market demand is difficult to improve, the trend of aluminum market volatility remains unchanged, and spot aluminum prices are expected to remain weak and volatile
in the short term.