June 2020 cable raw materials (aluminum) monthly report

First, the fundamentals

1.
According to data from the National Bureau of Statistics, the output of primary aluminum (electrolytic aluminum) in May was 2.
98 million tons, a year-on-year decrease of 0.
1%; Total production from January to May was 14.
81 million mt, up 2.
1%
y/y.

2.
According to data from the National Bureau of Statistics, the national alumina output in May 2020 was 5.
935 million tons, with a cumulative output of 28.
929 million tons, a year-on-year decrease of 4.
60% and a cumulative decrease of 5.
80%.

3.
According to data from the General Administration of Customs, China's exports of unwrought aluminum and aluminum products in May 2020 were 382,900 tons, a year-on-year decrease of 28.
56% and a month-on-month decrease of 13.
21%.

From January to May 2020, China's cumulative exports of unwrought aluminum and aluminum products were 2.
0119 million tons, a year-on-year decrease of 18.
6%.

As of May 2020, exports of unwrought aluminum and aluminum products have declined
year-on-year for 11 consecutive months.

4.
Customs data show that in May 2020, China's alumina exports were 02,600 tons, with a cumulative export of 65,200 tons from January to May; 268,600 tons of alumina was imported in May, and 1,516,100 tons were imported from January to May, an increase of 459.
45%
year-on-year.
The net import of alumina in May was 265,900 tons, and the cumulative net import from January to May was 1.
4509 million tons
.

5.
The General Office of the Ministry of Industry and Information Technology issued the notice
of the first batch of industry standard revision project plans in 2020.
415 project plans involving steel, nonferrous metals, gold, rare earths, automobiles, electronics, communications, building materials, machinery, etc.
, of which 287 were formulated and 128 were revised; 177 key special standards, 39 basic public welfare standards, and 199 general standards; There are 396 product standards and 19 energy conservation and comprehensive utilization standards
.

Second, the market review

Shanghai aluminum continued to have a strong trend this month, especially the contract of the month, which was strongly supported by spot and rose all the way
.
As of the end of the month, the main force of Shanghai aluminum closed at 13830 yuan / ton, up 4.
65%
from the end of May.
The warming of the macro atmosphere provides a hotbed for the general rise of metals, and the continuous unexpectedly unexpected decline has become the biggest driving force
for the repeated strengthening of aluminum prices.
As aluminum consumption gradually enters the off-season, while smelting capacity continues to release increments, the margin of supply and demand will further weaken, the arrival of inventory inflection point is not far away, aluminum price upward resistance increases, but considering the uncertainty of the accumulation rhythm and the difficulty of returning to the high level of inventory before the delivery of the July contract, aluminum prices may not fall smoothly
.

In terms of external trading, the center of gravity of Lun Aluminum moved up this month, and as of the end of the month, the overall shock was around $1620, up 5.
2% from May; From the overall trend, the overseas epidemic is still severe, economic recovery still takes time, and the slowdown in demand also has a certain inhibition of the trend of Lun aluminum, Lun aluminum continues to climb limited space, it is expected that in July Lun aluminum or fall into a shock pattern, the overall fluctuation range of 1550-1680 US dollars
.

In terms of the market, aluminum prices continued to rise, and shipments from holders increased, but the price was more up, and the premium remained high after the change of month, and the overall supply of the market was acceptable; The enthusiasm of middlemen to enter the market has increased, and transactions are frequent, but downstream enterprises are more afraid of heights, coupled with the influence of the off-season, receiving goods is relatively cautious, and market transactions are mostly contributed
by traders.

East China, a series of stimulus policies support, and electrolytic aluminum stable destocking pattern, aluminum plant price control and other multiple favorable stimuli, June aluminum prices continued to move up, and the increase has expanded compared with May, as of June 30, Yangtze River spot aluminum prices around 14170 yuan / ton, up 710 yuan / ton from the end of May, a monthly increase of 5.
27%.

After entering July, it still maintained a strong trend, and the current price of Yangtze River aluminum has risen to 14,430 yuan / ton, approaching 14,500.

In South China, as of June 30, the price of aluminum ingot tickets in South China was between 14460-14560 yuan / ton, up 650 yuan from the end of May, slightly inferior to East China; In terms of market transactions, with the arrival of the off-season, corporate orders have decreased, dragging down the strength of entering the market, and the current price is at a relatively high level, merchants are more cautious in receiving goods, and the transaction is average
.

3.
Inventory

As of the end of June, LME aluminum inventory was 1.
6426 million tons, a new high since May 2017, an increase of 141,700 tons from the end of May, an increase of 9.
44%, the growth rate has slowed down, mainly due to the lifting of lockdowns in various places, demand has improved, but the overseas epidemic is still more severe, and the recovery of demand is limited, so that the overall Lun aluminum inventory is still showing a growth trend, and the short-term aluminum inventory will still maintain a growth trend
.

Compared with the growth of Lun aluminum inventory, domestic Shanghai aluminum inventory has declined for the third consecutive month in June, and as of June 24, Shanghai aluminum inventory was 223,700 tons, down 72,600 tons from the end of May, a decrease of 24.
5%.

Domestic electrolytic aluminum social inventory (including SHFE warehouse receipt): 111,000 tons in Shanghai, 23.
3 tons in Wuxi, 101,000 tons in Hangzhou, 45,000 tons in Gongyi, 160,000 tons in Nanhai, 57,000 tons in Tianjin, 8,000 tons in Linyi, 04,000 tons in Chongqing, and the total inventory of aluminum ingots in the place of consumption is 719,000 tons
.

Fourth, the waste market

In June, the price of scrap aluminum in June has not been as positive as in April and May, and the price of scrap aluminum in the South China market in June rose by about 300 yuan, and the current price of 63 old materials is around 10850, and the price of aluminum wire is around 12700; At present, aluminum alloy spray coating in East China is around 10400-10500, broken bridge material 9500-9600, can price around 8650, pure can can can be increased
.

The market price continues to move up, the holder is actively shipped, the market supply is acceptable, but the low-price source is relatively rare, but with the rise in raw material prices, the price of recycled aluminum alloy ingots has stagnated, the profit of smelters has narrowed, and even losses, the enthusiasm of manufacturers to receive goods has not been as strong as at the beginning, and even the phenomenon
of receiving goods at a low price.
With the phenomenon of manufacturers receiving goods and price pressure, scrap aluminum growth or will slow down, easy to rise and fall trend will change, it is not recommended that merchants chase too high, beware of falling, short-term is expected to rise and fall space is not large, the overall or stable, holders of high to reduce inventory
.

5.
Market outlook

From the trend point of view, in the short term in the destocking and spot support under the support of aluminum prices continue to run at a high level, but after entering the off-season, the trend of weak supply and demand in the later period is becoming more and more obvious, and the profit of aluminum ingot spot imports is still large, imported aluminum ingots continue to flow into the country, smelters also accelerate the resumption of production, according to the current and later production resumption plan, aluminum supply pressure still exists, negative factors continue to accumulate, the overall fundamentals weaken, aluminum prices may be difficult to continue to rise
.
It is recommended to continue to pay attention to the speed of electrolytic aluminum destocking and spot support, and it is expected that there may be a risk
of correction in aluminum prices in July.