October 2019 cable raw materials (aluminum) monthly report

First, the fundamentals

1.
According to data from the National Bureau of Statistics, the output of electrolytic aluminum in September was 2.
9 million tons, down 1.
6%
year-on-year.
The total output from January to September was 26.
37 million tons, an increase of 1.
1%
year-on-year.
The operating capacity of electrolytic aluminum remained low, and the dematerialization of electrolytic aluminum inventory continued, which was positive for aluminum prices
.

2.
According to data from the National Bureau of Statistics, the national alumina output in September 2019 was 5.
833 million tons, down 3.
4% year-on-year, and the total output from January to September was 55.
592 million tons, up 4.
7%
year-on-year.
From the perspective of the start of alumina, affected by the environmental protection in autumn and winter, the production of alumina in the northern region has been compressed, but Jinzhong hopes that production will be resumed by the letter, so the actual output has little impact
.

3.
According to data from the General Administration of Customs, the export volume of aluminum and aluminum products in China in September 2019 was 435,000 tons, down 31,000 tons from August and 14.
7%
lower than last year.
From January to September, the cumulative export volume of aluminum and aluminum products in China was 4.
37 million tons, an increase of 2.
8%
year-on-year.
Since April this year, the price of aluminum has continued to weaken, so that export profits continue to decline, aluminum exports year-on-year growth rate continues to slow down, although China's aluminum exports only account for about 10% of the total domestic demand, aluminum exports continue to decline will still inhibit the trend
of aluminum prices.

4.
Customs data show that China's alumina imports in September 2019 were 150,000 tons, a year-on-year increase of 326.
7%; From January to September, the import volume was 790,000 tons, a cumulative increase of 93.
3%.

In September, 34,345 tons of alumina were exported, down 79.
3% year-on-year; From January to September, the cumulative export was 223134 tons, down 58.
6%
year-on-year.
The growth of domestic imports is mainly due to the large price difference between domestic and overseas alumina, which stimulates domestic imports
.

5.
Customs data shows that China's total imports of aluminum scrap and scrap in September 2019 were 114,300 tons, a decrease of 18.
7% month-on-month and a year-on-year increase of 17.
9%.

Among them, the United States is the largest supplier, and China imported 27,000 tons of scrap aluminum from the United States in September, down 18% year-on-year and more than 30%
month-on-month.
Canada followed suit, with China importing 14,000 tonnes of aluminum scrap from Canada in September, up more than 30%
year-on-year.

Second, the market review

This month's Shanghai aluminum trend is also weaker, the overall low shock market, the beginning of the month coincides with the National Day small holiday, the domestic market is closed, and the market arrival during the National Day increased, and the prospect of Sino-US trade agreements is uncertain, Shanghai aluminum fell into a shock pattern, after the holiday Shanghai aluminum all the way down, intraday fell below the 13800 important mark support, the lowest down to 13720, a new low in 3 and a half months, under macro pressure, and downstream consumption weakness, destocking slowdown and other negative inhibition, Shanghai aluminum low shock, The overall shock is in the 13700-13900 range, but in view of the continuous destocking of domestic aluminum ingots, and the high premium of spot aluminum, Shanghai aluminum material has little room to fall, the main force continues to pay attention to the bottom around 13700-13800, it is expected that Shanghai aluminum or shock stabilize in November, continue to pay attention to the range of 1.
37-14,000
.

In terms of external trading, this month's Lun aluminum low volatility, the overall intraday volatility in the range of 1700-1760 US dollars, the beginning of the month coincides with the new round of Sino-US trade negotiations is about to begin, and the domestic futures due to the National Day closed, the market trading cautious, Lun aluminum fell into a weak pattern of shock, the lowest intraday down to 1705 US dollars, a new low since January 10, 2017, and then the results of Sino-US trade negotiations were significantly better than expected, but the market performance was stable, Lun aluminum volatility stabilized, did not rise sharply, the highest intraday climbed to $1760, Macro uncertainty still dominates the trend of aluminum prices, coupled with the slowdown of the downward trend of Lun aluminum inventory, resulting in a slightly weaker trend of Lun aluminum, from the trend point of view, lack of favorable boost, Lun aluminum trend is still weak, below temporarily pay attention to the $1700 mark support, it is expected that in November Lun aluminum first oscillated and fell and then stabilized, or fell below the previous low, the overall fluctuation range of 1680-1780 US dollars
.

In terms of market transactions, the holders sell at a high price, and the middlemen buy actively, but the downstream is subject to the restrictions of orders, only buying on demand, and the overall transaction is average
.
East China, the beginning of this month coincided with the National Day holiday, the impact of electrolytic aluminum inventory increase after the holiday, and the market focused on Sino-US trade negotiations, trading cautious, aluminum prices under pressure, East China spot aluminum as low as 13750 yuan / ton, and then by the continued decline in inventory, aluminum prices stabilized
.
As of October 31, the spot aluminum price in East China was 13,970 yuan / ton, down 20 yuan / ton from the end of September, and the spot premium was 100
.
In South China, as of October 31, the price of aluminum ingots in South China was between 14120-14220 yuan / ton, down 120 yuan / ton from the end of September, affected by weak consumption and abundant inventory, the price trend of aluminum ingots in the South China Sea this month was significantly weaker than that in East China, and the price difference between the two has narrowed to 200
.
Traders are more and less connected, downstream wait-and-see sentiment is strong, and the overall transaction is poor
.

3.
Inventory

As of October 31, the total inventory of Lun aluminum was 959,050 tons, an increase of 31,575 tons from the end of September, an increase of 3.
4%; Obviously, inventory growth is also one of the factors inhibiting the weak trend of
Lunaluminum.
As of October 25, the total aluminum inventory of the Shanghai Exchange was 294837 tons, down 19,074 tons, or 6.
07%,
from the end of September.
Domestic social stocks, as of October 31, Shanghai area 150,000 tons, Wuxi area 231,000 tons, Hangzhou area 46,000 tons, Gongyi area 61,000 tons, Nanhai area 298,000 tons, Tianjin 52,000 tons, Linyi 08,000 tons, Chongqing 24,000 tons, consumption area aluminum ingot inventory total 870,000 tons, down 32.
35%
from the beginning of January.

Fourth, the waste market

Scrap aluminum prices remained stable overall in October; At present, the mainstream price of clean machine aluminum in South China is around 9800, and the price of aluminum wire is around 12100; At present, the mainstream receipt price of aluminum alloy spraying old materials in East China is around 10200, aluminum wire is around 11800, cans are around 8500, and clean broken bridges are about
9700.

In terms of the market, the market supply is tight, the holders are shipping at high prices, the overall inventory of medium and large freight yards and manufacturers is low, and the receipt of goods is positive
.
Aluminum rod and aluminum profile manufacturers tend to 1, 3, 6 series scraps and aluminum profiles, and some manufacturers receive goods at a higher price due to lack of goods; In addition, it is understood that recycled aluminum alloy ingot manufacturers due to raw material problems, the current inventory of aluminum alloy ingots is generally not high, some manufacturers need to book in advance to schedule, which is also the main reason for
the recent decline in the price of recycled aluminum alloy ingots.
In addition, it is reported that Henan and Shandong have more serious environmental protection requirements, and the market is closed more
.

The market lacks actual benefits, macro instability factors are still there, and aluminum prices have insufficient momentum, but scrap aluminum is currently in short supply, the price resistance attribute is strong, and it is expected that the scrap aluminum price will stabilize
in November.

5.
Market outlook

This month's Shanghai aluminum trend is weak, the overall low shock market, under macro pressure, as well as downstream consumption, destocking slowdown and other negative suppression, Shanghai aluminum low volatility, but in view of the domestic aluminum ingots continue to destock, and spot aluminum to maintain a high premium background, it is expected that there is little room for decline, and it is expected that November or shock stabilization
.
Although the "Golden Nine Silver Ten" is the peak consumption season, it is obvious that the peak season is not strong, the overall consumption of the market has not changed significantly, there is a lack of favorable boost, and the short-term aluminum price shock pattern remains unchanged
.