March 2022 cable raw materials (aluminum) monthly report

First, the fundamentals

1.
According to the latest data from the National Bureau of Statistics, the output of electrolytic aluminum in January and February 2022 was 6.
327 million tons, down 1.
4% year-on-year, and the actual production days in February were slightly less and some enterprises in Guangxi stopped production, so it fell
year-on-year.
From January to February, the output of aluminum products was 8.
663 million tons, an increase of 3.
8%
year-on-year.
From January to February, the output of aluminum alloy was 1.
515 million tons, an increase of 7.
2%
year-on-year.

2.
According to data from the Bureau of Statistics, the cumulative output of alumina in the country from January to February 2022 was 11.
775 million tons, a decrease of 868,000 tons over the previous year, and the cumulative output decreased by 7.
3% year-on-year; The average monthly output is 5.
888 million tons
.

3.
According to data released by the General Administration of Customs, China's exports of unwrought aluminum and aluminum products in February 2022 were 420983 tons, with a year-on-year growth rate of 12.
8%; The cumulative quantity from January to February was 1033949 tons, with a year-on-year growth rate of 22.
8%.

The cumulative amount from January to February was 2594854 million yuan, a year-on-year growth rate of 55.
3%.

4.
According to the latest data from the General Administration of Customs, China's alumina exports in February were 00,000 tons, down 40.
8% year-on-year; From January to February, the cumulative export was 10,000 tons, down 56.
9% year-on-year; From January to February, the cumulative import of alumina was 201,100 tons
.
News: On March 20, the Australian government announced an immediate ban on the export of alumina and bauxite
to Russia.

5.
A report released by the International Aluminium Association predicts that aluminum demand will increase by 40% by the end of the century, and it is calculated that the global aluminum industry needs to increase overall primary aluminum production by 33.
3 million tons per year to keep up with the requirements
.
The report, titled "Opportunities for Aluminium in a Post-Covid Economy," expects demand growth in the transportation, construction, packaging and electrical sectors to be large
.
According to the report, these four industries could account for 75%
of the growth in aluminum demand this decade.
China is expected to account for two-thirds of future demand, with an estimated annual demand of 12.
3 million tons
.
The rest of Asia is expected to require 8.
6 million tonnes of primary aluminium per year, while North America and Europe are expected to require 5.
1 million tonnes and 4.
8 million tonnes
per year, respectively.

6.
Russia's aluminum exports in January 2022 increased by 3.
2% year-on-year to US$405.
9 million, with exports of 173,300 tons, down from 260,000 tons in the same period of the previous year, the Federal Customs Service of Russia,
reported.

Second, the market review

The overall performance of Shanghai aluminum this month rushed back down, and the intraday aluminum price rose above 24,000 driven by the rise in the external market, and the highest rose to 24,255 yuan / ton; As of the end of the month, the cumulative decline of the main contract of Shanghai aluminum was 0.
55%; The outbreak of the Russian-Ukrainian war in the month caused market panic, which also drove the tight supply of overseas markets, but domestically, the relative increase was not large, in addition, the actual impact of the overseas war on the domestic market was relatively limited, and the aluminum price rose in the first half of the year, on the one hand, driven by the strong external market, on the other hand, it was mainly supported by strong domestic fundamentals and low inventories
.

In terms of the market, under the demand of the "Golden Three" peak season, the orders of aluminum profile enterprises are acceptable, and the downstream enterprises are stable to replenish the warehouse, but with the resurgence of the epidemic, especially in the second half of the year, the transportation of domestic aluminum products is slow, the inventory is increasing in transit, the arrival of mainstream warehouses is reduced, and downstream processing enterprises have reduced production and stopped production due to limited raw material supply in some areas, and the market transaction has weakened
.

East China: The conflict between Russia and Ukraine continues, and the negotiations have not yet reached substantive results, European and American countries have successively announced a series of sanctions against Russia, and the market is increasingly worried about the energy crisis; Coupled with the frequent epidemics in many places in China in the middle and late months, market transportation has been blocked, and supply and demand have been affected
to a certain extent.
March aluminum price fluctuations are more violent, spot aluminum quotation range between 21480-23880 yuan / ton, as of March 31, spot aluminum price in 22610-22650, down 70 yuan / ton
from the end of February.

South China: The overall performance of aluminum ingots in South China in March first fell and then rose, pulling back some of the decline, as of the end of the month, the price of aluminum ingot tickets was between 22880-22980 yuan / ton, down 50 yuan / ton from the end of February, although the monthly decline was not large, but the aluminum price fluctuation in the month was more severe; Shenzhen was once closed due to the epidemic, which affected transactions; Downstream enterprises in other regions just need to receive goods, and the overall transaction is better than that in
East China.

3.
Inventory

LME aluminum inventories continued to decline in March 2022, and the decline widened, as of March 30, LME aluminum stocks were 654475 tons, down 169,550 tons, or 20.
6%, from the end of February; The decline in inventories supported the price obviously, and in March, Lun aluminum first fell and then rose, once exceeded $4,000 intraday, and hit a record high
.
In March 2022, Shanghai aluminum stocks continued to decline, and as of April 1, Shanghai aluminum stocks were 305805 tons, down 30,087 tons, or 9%, from the end of February; In addition, it is understood that as of March 31, the inventory of electrolytic aluminum in 8 mainstream consumption areas in China was 1.
041 million tons, which was 02,000 tons
more than last week.

Fourth, the waste market

The price of scrap aluminum in March was significantly better than that of the electrolytic aluminum market, and compared with the decline in the price of electrolytic aluminum, the price of scrap aluminum showed a significant increase, and the main supporting factor was the shortage of supplies; As of the end of the month, the price of spraying old materials in East China rose to around 17400, the broken bridge around 15800, the bright line around 19800, the can around 14900, up about 500 yuan from February, the increase in raw aluminum is slightly inferior to aluminum alloy, only around 200 yuan, and the current East China machine aluminum mainstream around
16800.

In terms of market transactions, many places were seriously affected by the epidemic in March, especially in Jilin, Shanghai, Jiangsu, Shenzhen, Quanzhou and other regions, and market transactions were seriously hindered; Due to transportation and other reasons, the scrap aluminum market is tight, which is also the main factor supporting the rise and fall of scrap aluminum, manufacturers generally feedback insufficient inventory, active searching, especially in the middle and late half of this situation is particularly prominent
.
In addition, it is understood that the orders of aluminum profile companies in mid-to-early March are acceptable, and the demand for scrap aluminum has increased, resulting in a significant increase in the price of aluminum alloy materials, with an increase of more than 500 yuan / ton
in some areas.

Due to the weak demand caused by the epidemic, it is difficult for scrap aluminum to have a sustained rebound, but under the support of tight supply, it is expected that the space below is also limited, and the short-term price of scrap aluminum is not up or down, or it will stabilize, and the overall performance in April may fall first and then rise
.

5.
Market outlook

Under the sudden influence of the epidemic, the aluminum market is facing a certain "weak supply and demand" situation in the short term, and Shanghai aluminum may operate slightly weakly; However, under the gradual easing of the epidemic in the future market, aluminum prices will resume high range shocks, and destocking will continue
after downstream demand picks up.
Recently, the contradiction between Russia and Ukraine has eased, but the sanctions of Europe and the United States have intensified, in addition, Russia has also made countermeasures, "gas cut" measures or will aggravate the shortage of natural gas in Europe, from the current market situation, overseas low inventory superimposed on aluminum production reduction is expected to continue to support the price of aluminum aluminum, short-term due to market pessimism affected by aluminum or the rise may slow down, it is expected that the market may still climb, the lower support is concerned about 3400, it is expected that the aluminum price next month or fluctuate in the range of 3400-3700
.