May 2021 cable raw materials (aluminum) monthly report

First, the fundamentals

1.
According to data from the National Bureau of Statistics, in April, China's primary aluminum (electrolytic aluminum) output was 3.
346 million tons, a year-on-year increase of 12.
4%; In January ~ April, the cumulative output of primary aluminum was 13.
018 million tons, a year-on-year increase of 9.
6%.

2.
According to data from the Bureau of Statistics, in April 2021, the output of alumina was 6.
490 million tons, a year-on-year increase of 7.
0%; In January ~ April, the total output of alumina was 25.
799 million tons, a year-on-year increase of 12.
2%.

3.
Data show that China's exports of unwrought aluminum and aluminum products in April 2021 were 437,284.
5 tons, a decrease of 1.
4% from 443,483.
7 tons in March 2021 and a year-on-year decrease of 0.
88%; The export value was 1,404.
2 million US dollars, an increase of 19.
76%
year-on-year.
From January to April 2021, the cumulative export volume of unwrought aluminum and aluminum products was 1,722,690.
3 tons, an increase of 5.
8% year-on-year; The cumulative export value was 5,339.
4 million US dollars, an increase of 22.
1%
year-on-year.

4.
Data show that China's alumina imports in April were 235,100 tons, an increase of 7.
4% year-on-year; export of alumina was 0.
87 million tons, down 69.
9% year-on-year; From January to April, the cumulative import of alumina was 991,200 tons, down 20.
55% year-on-year; From January to April, the cumulative export of alumina was 31,700 tons, down 49.
32%
year-on-year.

In May and April, global alumina production was 11.
598 million tons, down 2.
63% from March (11.
911 million tons) and up 2.
59%
from February (11.
737 million tons).
Compared with April last year, the output (10.
849 million tons) increased by 6.
90%.

From January to April, global alumina production accumulated 45.
856 million tons, an increase of 5.
12%
over the same period last year (43.
623 million tons).

6.
Foreign media news, the new Z report released by the World Bureau of Metal Statistics (WBMS) shows that the global primary aluminum market supply shortage from January to March 2021 is 70,000 tons, and the oversupply in 2020 is 1.
07 million tons
.
The demand for primary aluminum from January to March was 17.
21 million tons, an increase of 1.
389 million tons
over the same period in 2020.
Primary aluminum production increased by 5.
9%
from January to March 2021.

Second, the market review

In May, Shanghai aluminum rushed back down, in the month in the long capital promotion and rapid rise in consumption and other multiple favorable factors, aluminum prices rose more than expected, the main force once exceeded the 20,000 mark, but then due to the high price caused by the national concern, under the control of various departments of multiple policies, aluminum prices returned to the range of 1.
8-19,000 oscillations, as of the end of the month, Shanghai aluminum main 2107 contract closed at 18825, a cumulative decline of 0.
87%.

In terms of the market, the price in the early stage is too high, traders have a hoarding phenomenon, the market supply performance is abundant, but the downstream enterprises are afraid of heights, there are not many goods in the market, the price falls sharply in the middle and late months, the market is unstable, traders dare not rush to receive goods, how fast forward and fast out operation, downstream enterprises buy a small amount of low, market activity is acceptable
.

East China, aluminum prices in May showed a rush back down the market, the price rebounded rapidly at the beginning of the month, spot aluminum prices once exceeded 20,000 / ton, hitting a new high in nearly a decade, but with the rising price, the market has more than a decade of stockpiling phenomenon, the government came forward to say that to track and analyze the situation at home and abroad and market changes, effectively respond to the rapid rise in commodity prices and its associated impact, under policy regulation, market confidence was suppressed, aluminum prices fell sharply, giving up most of the previous gains, as of the end of May, East China spot aluminum at 18760-18800 yuan / ton, down 50 yuan / ton
from the end of April.

As of the end of the month, the price of aluminum ingots in South China was between 19170-19270 yuan / ton, up 90 yuan / ton from the end of April, which was slightly resistant to decline in East China; In terms of the spot market, the market is abundant, downstream enterprises mainly need to stock up on the low, and traders are more active, driving market transactions
.

3.
Inventory

LME aluminum stocks in May continued the downward trend in April, showing a sharp decline, a one-day decline of nearly 20,000 tons, as of the end of the month, LME aluminum stocks were 1,718,300 tons, down 116,850 tons from the end of April, a decline of 6.
4%.

Shanghai aluminum inventories showed a downward trend in May, but the decline slowed down significantly from April, and by the end of the month, Shanghai aluminum inventories were 329572 tons, down 27,037 tons, or 7.
6%,
from the end of April.

Fourth, the waste market

In May, aluminum prices rushed back down, but scrap aluminum prices showed firm, South China rose significantly, some varieties rose as high as 850 yuan, as of the end of the month, crushed raw aluminum around 15,000, aluminum wire around 16,250; Other regions rose more than 200-400 yuan, the current East China aluminum alloy paint material around 14100, 6 meters around 14400, broken bridge material 12800, all compared with April has been raised, the performance is better than aluminum ingots
.

In terms of the market, the price continued to rebound at the beginning of the month, and the holders chose to cover the goods to rise, but as the price fell, merchants were worried again, shipments increased, and the tight supply of market supplies was eased, and some freight yards said that the price fell in mid-to-late May made them lose serious losses, especially the merchants who stockpiled goods in the early stage, most of them shipped at a loss
.
Due to the lack of raw material inventory in the early stage, the price decline and the enthusiasm for receiving goods increased, and the phenomenon of replenishment occurred, and the overall market transaction was acceptable
.
With the gradual arrival of the off-season of consumption, and the influence of policies, it is expected that the short-term aluminum price trend is still weak, scrap aluminum or follow the possibility of falling, it is recommended that holders should not stock up too much, downstream manufacturers can properly replenish the stock at the dip
.

5.
Market outlook

Due to the traditional peak season, the overall domestic consumption in May exceeded expectations, domestic inventories continued to deteriorate, and the basic orientation laid a good foundation for the gradually rising aluminum prices, coupled with the continuation of the macro liquidity easing policy and the entry of long funds, aluminum prices climbed to a record high
。 But back to reality, too high prices have led to a sharp narrowing of profits in the middle and downstream enterprises, and the market has a lot of hoarding phenomenon, the country inevitably introduces relevant policies to curb the rise of commodities, and under the positive response of various departments, short-term macro-control risks still exist, aluminum prices above pressure is still large, coupled with the arrival of the off-season in June, it is expected that next month's aluminum prices may be difficult to perform strongly, and the shock adjustment is the mainstay
.