May 2020 cable raw materials (aluminum) monthly report

First, the fundamentals

1.
According to data from the National Bureau of Statistics, in April 2020, the national electrolytic aluminum output was 2.
967 million tons, with a cumulative output of 11.
828 million tons, a year-on-year increase of 1.
50% and a cumulative increase of 2.
40%.

2.
According to data from the National Bureau of Statistics, the national alumina output in April 2020 was 6.
067 million tons, down 3.
2%
year-on-year.
From January to April 2020, the national alumina output totaled 22.
995 million tons, down 6.
1%
year-on-year.

3.
According to data from the General Administration of Customs, China's exports of unwrought aluminum and aluminum products in April were 441,177.
1 tons
.
Exports of unwrought aluminium and aluminium in the first four months of this year totalled 1,628,923.
2 tonnes, down 15.
9%
from 1,936,337.
8 tonnes in the same period last year.

4.
Customs data show that 72,000 tons of aluminum scrap were imported in April 2020, a year-on-year decrease of 53.
3% and a month-on-month decrease of 6.
7%.

From January to April, the cumulative import of scrap aluminum was 270,000 tons, a year-on-year decrease of 64.
7%.

5.
According to Chinese customs data, China's bauxite imports rose to a record high
in the first quarter of 2020 due to increased demand and lower sea freight.
In the first three months of 2020, China imported 28.
41 million mt of bauxite, the highest quarterly import on record
.
Compared to the bauxite imported in the fourth quarter of last year, the bauxite volume in the first quarter of 2020 increased by 26.
01% and compared to the first quarter of 2019, an increase of 9.
99%.

Second, the market review

This month, Shanghai aluminum continued to continue the strong trend of volatility, especially the contract of the month, the trend is more obvious
.
The main intraday broke through the 13,000 mark, climbing to 13,250, with a cumulative monthly increase of 4.
74%.

This month, domestic social inventories continued to show a sharp decline, far exceeding expectations, and the tight flow of market supplies made aluminum prices slightly firm; Short-term aluminum prices continue to fluctuate strongly, but the fundamentals are not good, the high is cold, beware of rushing back down, spot aluminum in June focus on fluctuations around 13100-13600 yuan
.

In the external market, Lun aluminum recovered slightly after the low volatility this month, breaking through the $1500 mark during the session, and climbing as high as $
1541.
The overseas epidemic continues to spread, the global economy has encountered an unprecedented crisis, and although the government has introduced a number of favorable measures, the panic has not yet been eliminated
.
In addition, demand has decreased, and aluminum inventories have continued to increase, restraining the rise
in aluminum prices.
However, as the macro gradually eased, the world began to unblock, and gradually recovered the economy, boosting market demand, and the growth rate of Lun aluminum inventory slowed down, Lun aluminum received a short-term boost, the center of gravity moved up, breaking through the $1500 mark intraday, and climbing to $1541
.

In terms of the market, with the gradual rise in prices, traders are more active, frequent market entry operations, holders firm selling prices, spot supply slightly tightened, downstream enterprises are more afraid of heights, worried about price declines, wait and see or buy on demand, the overall market transaction is better than in April
.

East China, market confidence rebounded, a series of stimulus policies frequent, May aluminum prices continued the upward trend in April, the center of gravity moved up obviously, East China spot aluminum broke through 13,000 after continuing to move up, the highest rise to 13,520 yuan / ton, as of May 29 the price was 13,440-13,480 yuan / ton, up 660 yuan from the end of April, an increase of 5.
2%, the holder firm selling price, spot premium once rose to 250 yuan
.

In South China, as of May 29, the price of aluminum ingot tickets in South China was between 13810-13910 yuan / ton, up 620 yuan / ton from the end of March, an increase of 4.
7%; In mid-May, the supply in the South China market was tight, the spot was at a high premium, and then it fell back, but it still maintained the premium state, and downstream enterprises bought on demand to maintain, and the market activity increased
.

3.
Inventory

In May, LME aluminum stocks continued the growth trend since late March, and by the end of May, LME aluminum stocks were 1493075 tons, an increase of nearly 150,000 tons from the end of April, an increase of 11%.

The overseas epidemic continues to deteriorate, market confidence is insufficient, and short-term aluminum inventories will still maintain a growth trend
.

Compared with the growth of Lun aluminum inventory, domestic Shanghai aluminum inventory has fallen for the second consecutive month in May, and as of May 22, Shanghai aluminum inventory was 322,060 tons, down 88,500 tons
from the end of April.
Domestic electrolytic aluminum social inventory (including SHFE warehouse receipt): Shanghai 123,000 tons, Wuxi 35.
4 tons, Hangzhou 108,000 tons, Gongyi 51,000 tons, Nanhai 180,000 tons, Tianjin 58,000 tons, Linyi 08,000 tons, Chongqing 11,000 tons, consumption area aluminum ingot stocks totaled 893,000 tons, down 86,000 tons
from the previous Thursday.

Fourth, the waste market

In May, the price of scrap aluminum continued to rise, South China rose more than 500 yuan, the current price of mechanical aluminum is around 10,000, aluminum wire price is around 12,000; other regions are slightly inferior, but still more in 300-400 yuan, the current East China aluminum alloy spraying old material around 10200, broken bridge material around 9300, cans around 8600; 1 series aluminum scrap price in 85-87 discount
.

In May, the price picked up significantly, the shipment sentiment of the holders improved significantly, and the market circulation gradually increased, especially the sources of aluminum alloy materials, aluminum chips, raw aluminum and other sources, which increased significantly compared with April, but relative to downstream demand, the supply is still tight, the willingness of the holders to hold up the price is strong, the market has a low price supply, and scrap aluminum has been in a market that is prone to rise and fall; In terms of downstream manufacturers, due to insufficient raw material inventory, manufacturers are more motivated to receive goods, but the cost of raw materials is high, and the price of recycled aluminum alloy has not risen, and corporate profits have narrowed seriously
.
Overall transactions picked up
in May.
Short-term scrap aluminum resources are in short supply, short-term materials are easy to rise and difficult to fall trend unchanged, goods more holders are conducive to normal shipments, a small amount of goods to rise
.

5.
Market outlook

From the trend point of view, short-term policies and destocking are still supportive of aluminum prices, but in view of the fact that the overseas epidemic has not ended, external demand is weak, and the internal strength and external weak trend make aluminum face import shocks, June is about to usher in the consumption off-season, in the actual fundamentals have not significantly improved the impetus, it is expected that the increase in aluminum prices will be limited
。 Shanghai aluminum main force below temporarily focus on the 13,000 mark support, short-term in the spot firm, is expected to temporarily stabilize this mark, and continue to move the center of gravity up, above the focus on the pressure level around 1.
33-13,500, with the accumulation of bearish factors, need to be vigilant of the risk of aluminum prices rushing back down in the later period; operationally can hold a small amount of goods, mainly buy on demand
.