June 2019 cable raw materials (aluminum) monthly report

First, the fundamentals

1.
Due to the rise in the price of electrolytic aluminum in May, the production enthusiasm of electrolytic aluminum enterprises has increased, the willingness to restart production capacity has increased, and the output has increased; According to data, China's primary aluminum production in May 2019 was 2.
98 million tons, an increase of 60,000 tons from April, and an increase over the same period of the previous year; From January to May 2019, China's primary aluminum production was 14.
45 million tons, an increase of 2.
7%
over the same period of the previous year.

2.
Although the centralized reduction and shutdown of alumina in Shanxi Province last month due to environmental protection and other reasons made the market worried about the shortage of aluminum raw material supply, but the price increase also stimulated the enthusiasm of manufacturers to start work, data released by the National Bureau of Statistics showed that China's alumina production in May increased by 0.
1% year-on-year to 6.
243 million tons
.

3.
According to customs data, China's imports of unwrought copper and copper products in May were 361,000 tons, down 23.
2% from 470,000 tons in the same period last year and 10.
9%
from 405,000 tons in April.

4.
China's scrap metal imports in May climbed 8.
6% month-on-month to 380,000 tonnes
.
China's scrap metal imports from January to May were 1.
46 million tons, down 40.
7%
year-on-year.
Among them, scrap aluminum imports were 180,000 tons, an increase of 40,000 tons from April, a year-on-year increase of 57.
8%, mainly because scrap metal imports will be restricted on July 1
.

Second, the market review

This month, the trend of Shanghai aluminum is slightly weak, macro is weak, consumption is weak, and alumina fell below the 3000 mark after continuing to move down, and the decline has not stopped, multiple bearish factors suppressed, Shanghai aluminum since the beginning of the month all the way down, intraday loss of the 14000 mark, the lowest down to 13725, then copper prices by Chile strike and other factors rose, but lack of substantial positive boost, obviously with insufficient momentum up, Shanghai aluminum index intraday pressure at the 14,000 mark, from the trend point of view, downstream has entered the consumption off-season, and macro factors uncertainty still inhibit the trend of aluminum prices, short-term aluminum prices are difficult to do, continue to pay attention to 1.
38-14,000 range shock, the overall trend is still weak, there is a possibility of falling below this month's low, it is expected that the July Shanghai aluminum index fluctuation range of 1.
36-14,100
.

In terms of the external market, this month Lun aluminum first oscillated and then rose slightly, the beginning of the month lacked a favorable boost, and macro bearish dominated the metal trend, Lun aluminum shock fell slightly, the lowest intraday down to 1745 US dollars, a new low in 29 months, but Sino-US trade relations eased, and copper prices rose to boost, Lun aluminum ushered in a short rebound market, intraday breakthrough through the 1800 mark pressure level, the highest climbed to 1838 US dollars, but lack of substantial positive boost, Lun aluminum rise momentum is limited, and the pressure of the 1800 mark remains, Lun aluminum again tested this threshold pressure level, from the trend point of view, the market at the end of the month focused on the G20 summit results, so trading cautious, short-term Lun aluminum continued to fluctuate around the 1800 mark, but in the medium and long term, macro bearish still dominates the metal trend, and in the past two months consumption off-season, aluminum prices may be difficult to have a big rise, it is expected that the overall fluctuation range of Lun aluminum in July is 1750-1850 US dollars
.

In terms of the market, the market still shows that the supply exceeds demand, especially after entering June, downstream enterprises gradually turn to the off-season, orders weaken, demand weakens, the enthusiasm to enter the market is not high, coupled with macro instability, merchants are not optimistic about the future market, traders are not as active as in May, and the overall market volume has declined
slightly.

East China, due to the cost of electrolytic aluminum alumina prices continue to fall, the current East China has fallen to around 2850, the cost of the downward movement to the aluminum price to bring greater bearishness, coupled with the early Sino-US trade tensions dragged down, June aluminum price center of gravity significantly downward, the lowest fell to around 13,800, as of the end of June, East China spot aluminum has fallen to 13800-13840 yuan / ton, down 370 yuan
from the end of May.

In South China, the price of aluminum ingots in South China fluctuated lower in June, with the operating range of 14130-14580, and as of the end of June between 14120-14220, down 370 yuan
from the end of May.
In the first half of the South China market, the market transaction is acceptable, the activity of traders is high, and the reduction of downstream orders is not obvious, but the transaction in the middle and late half of the market has weakened, and the macro is unstable, and the merchant operation is more cautious
.

3.
Inventory

LME aluminum inventory continued its downward trend this week, as of June 27, LME aluminum total inventory 1003750 tons, down 13.
1% from May, from the trend point of view, the overall downward trend of LME aluminum remains unchanged
.
As of June 21, the aluminum inventory of the Shanghai Exchange continued to show a downward trend, as of June 21, the aluminum inventory of the Shanghai Exchange was 428,900 tons, a decrease of 78,000 tons, or 15.
46%,
from the end of May.
Domestic social stocks, as of June 27, Shanghai area 208,000 tons, Wuxi area 353,000 tons, Hangzhou area 60,000 tons, Gongyi area 101,000 tons, Nanhai area 246,000 tons, Tianjin 54,000 tons, Linyi 07,000 tons, Chongqing 22,000 tons, consumption area aluminum ingot inventory total 1.
051 million tons
.

Fourth, the waste market

In June, the scrap aluminum market performed sluggishly, following the decline in aluminum ingot prices, South China fell by 350 yuan, and the current mainstream price of clean machine aluminum is around 10,000; Other regions also have 100-300 degrees of decline, of which the price of aluminum profiles is relatively resistant, only down 100 yuan from May, machine aluminum, miscellaneous aluminum and other low-grade scrap aluminum prices fell more obviously, the current mainstream receipt price of aluminum alloy spraying old materials in East China is around
10100.

In terms of market transactions, the scrap aluminum market in mid-to-early June was relatively abundant, and with the continuous lowering of prices, some holders appeared to cover the goods, and the market supply decreased; The transaction situation has diverged, first, in terms of recycled aluminum plants, since June, the price of downstream ADC12 aluminum alloy has fallen, the lowest in East China has fallen to around 13200, manufacturers' profits have seriously narrowed, and even losses, the enthusiasm for scrap aluminum raw material procurement is not high, control the amount of goods received and the price of receipts, some small and medium-sized recycled aluminum plants have stopped working; Second, aluminum rod and aluminum profile factories, relative to recycled aluminum plants, the transaction is acceptable, with a slight decline in orders, but aluminum rod and profile factories still maintain normal procurement, which is also the main reason for
the decline in the price of relatively low-grade aluminum alloy materials.

The market predicts that the weather is gradually hot, the market supply has decreased, and since July 1, scrap aluminum imports have been restricted, making the supply tighter, or limiting the space for scrap aluminum prices to fall, but considering that the market demand in the off-season is poor, it is expected that it is difficult to rise, and it is expected that scrap aluminum prices in July may stop
falling.

5.
Market outlook

This month, Lun aluminum first fluctuated and then rose slightly, lack of substantial positive boost, Lun aluminum rise momentum is limited, and the pressure of the 1800 mark remains, Lun aluminum again tested this threshold pressure level, from the trend point of view, the market at the end of the month focuses on the results of the G20 summit, so trading is cautious, short-term Lun aluminum continues to fluctuate around the 1800 mark, but in the medium and long term, macro bearish still dominates the metal trend, and in the past two months consumption off-season, aluminum prices may not have a big rise, it is expected that the overall fluctuation range of London aluminum in July is 1750-1850 US dollars
。 Macro weak, consumption turned weak, and alumina fell below the 3000 mark after continuing to move down, and the decline has not stopped, multiple bearish factors suppressed, Shanghai aluminum this month trend is slightly weak, from the trend point of view, aluminum prices have entered the consumption off-season, and macro factors of uncertainty still inhibit the trend of aluminum prices, short-term aluminum prices are difficult to do, continue to pay attention to 1.
38-14,000 range shocks, the overall trend is still weak, there is a possibility of falling below this month's low, it is expected that the Shanghai aluminum index fluctuation range in July is 1.
36-14,100
。