October 2020 cable raw materials (aluminum) monthly report

First, the fundamentals

1.
According to data from the National Bureau of Statistics, the output of ten non-ferrous metals in China in 2020 was 5.
32 million tons in September, a year-on-year increase of 7.
3%.

Production from January to September was 45.
18 million tons, a year-on-year increase of 3.
5%.

Among them, the monthly output of electrolytic aluminum was 3.
16 million tons, a year-on-year increase of 7.
9%, and the output from January to September was 27.
45 million tons, a year-on-year increase of 2.
8%.

In September, the new production capacity of electrolytic aluminum in Yunnan, Inner Mongolia and other provinces was put into operation
as planned.
In October, the import window is opened from time to time, the opportunity to import aluminum ingots still exists, and the domestic operating capacity will continue to be contributed by Yunnan, Inner Mongolia and other provinces, the supply side will maintain a steady rise, and it is expected that the production of electrolytic aluminum in October will still maintain a slight growth trend
.

2.
According to data from China's National Bureau of Statistics, China's alumina production in September increased by 13.
9% year-on-year to 6.
56 million tons; Alumina production from January to September decreased by 1.
9% year-on-year to 54.
246 million tons
.
In September, the new production capacity in the southwest region continued to increase, the operating rate of alumina plants in the northern region remained stable, and the overall daily average output of alumina in China recorded a slight increase
.
It is expected that alumina production in October may maintain a stable trend of small gifts, a new round of heating season has arrived, and the current policy is less likely to become stricter than the same period last year, so the increase or decrease of China's alumina operating capacity still needs to continue to pay attention to marginal cost changes and the two new investment capacity in southwest China
.

3.
According to data from the General Administration of Customs, China's exports of unwrought aluminum and aluminum products in September 2020 were 426,000 tons, down 2%
year-on-year.
In terms of value, China's exports of unwrought aluminum and aluminum products in September 2020 were US$1,143.
2 million, down 2.
1%
year-on-year.

4.
According to the latest data released by the National Solid Waste Network, the thirteenth batch of import restrictions in 2020 has been confirmed, of which the total approved imports of scrap copper are 5980 tons, the total approved imports of scrap steel are 1340 tons, and the total approved imports of scrap aluminum are 340 tons
.

Domestic primary aluminum production in May and September was 3.
110 million tons, an increase of 5.
3% year-on-year, and the cumulative output from January to September was 27.
609 million tons, an increase of 2.
4%
year-on-year.
The operating capacity is 38.
232 million tons, the highest since
July 2017.
The production progress in the third quarter is relatively fast, the industry supply has steadily increased, and the market needs to pay attention to the fact that the supply has broken through the bottleneck in recent years and entered the next level
.

6.
As of late October, the complete average cost of the electrolytic aluminum industry was about 12590 yuan / ton, and the average profit was about 2364 yuan / ton at a historical high
.
Driven by profits, new and resumed production capacity continued to be put into operation, with a total of 460,000 tons of capacity planned to be released
in November.
However, due to weather, power and construction progress, the production speed in Yunnan has been affected
to a certain extent.
Overall, supply pressure continues to increase, but there may be a possibility that the production rate will fall short of expectations
.

Second, the market review

The overall trend of Shanghai aluminum this month is good, the main force rose to 14910 / ton, the lowest fell to 14230 / ton, as of the end of the month, closed at 14370, up 225 from September, up 1.
6%.

The continuous recovery of overseas economy boosted the upward trend of aluminum prices, and this month, Lun aluminum as a whole showed a volatile upward trend, once breaking through the 1850 mark within the month, and the highest rose to 1872 US dollars / ton; However, under the second outbreak of the overseas epidemic, the rise in aluminum prices has converged, and by the end of the month, Lun aluminum once again returned to fluctuations around 1800, up about
2.
4% from September.

In terms of the market, the spot market in October was abundant in supply, and traders actively shipped goods, but the downstream consumption "gold nine silver ten" has not yet appeared, and the overall transaction volume was flat
compared with September.

East China: This month, East China spot aluminum prices ended the rise at the end of September, fell into a high shock trend, at the beginning of the month due to the National Day holiday, the increase in market arrivals and the negative sentiment of the epidemic in Europe and the United States, spot aluminum followed by aluminum fell into high volatility, consolidating around
15,000 yuan.
There is a lack of actual benefits, and the market is worried about the commissioning of electrolytic aluminum production capacity in the fourth quarter, and the upward trend of aluminum prices is weak
.
In October, the overall operating range of spot aluminum prices in East China was 14520-15080 yuan / ton, and as of October 30, the spot aluminum price in East China was between 14800-14840 yuan / ton, up 140 yuan / ton
from the end of September.

South China: This month, spot aluminum in South China also showed a high volatility market, the overall operation in the range of 14870-15310 yuan / ton, as of October 30, the market price of spot aluminum in South China was 14990-15090 yuan / ton, up 120 yuan
from the end of September.
The price difference with spot aluminum in East China has narrowed, about 190 yuan
.
From the perspective of transactions, the enthusiasm of market shipments is not reduced, downstream demand is mainly based on rigid demand, traders do not purchase much, and spot transaction performance is weak
.

3.
Inventory

As of October 30, LME aluminum stocks were 1462750 tons, an increase of 3,580 tons, or 0.
26%,
compared with the end of September.

This month's domestic Shanghai aluminum inventory showed an upward trend, especially in the first half of the month, the inventory growth trend is obvious, up to 249,000 tons, at the end of the month by the market demand improved, inventory slightly downward trend, as of October 23, Shanghai inventory in 237777 tons, an increase of 14,623 tons compared with the end of September, an increase of 6.
55%.

。 Domestic electrolytic aluminum social inventory (including SHFE warehouse receipt): 108,000 tons in Shanghai, 19.
7 tons in Wuxi, 71,000 tons in Hangzhou, 65,000 tons in Gongyi, 196,000 tons in Nanhai, 44,000 tons in Tianjin, 5,000 tons in Linyi, 2,000 tons in Chongqing, and the total inventory of aluminum ingots in the place of consumption was 688,000 tons, up 28,000 tons
from the end of September.

Fourth, the waste market

This month, the price of scrap aluminum in various regions showed an upward trend, the range was about 100-350, especially the price of crushed raw aluminum and crushed cooked aluminum, once became a star variety of the market, as of the end of October, the mainstream price of crushed raw aluminum in South China has risen to 11350-11550 yuan / ton, about 350 yuan higher than the end of September; The mainstream market price of crushed cooked aluminum rose to 10950-11050 yuan / ton, up about 350 yuan from the end of September, and the aluminum line was around 13000, up 100 yuan / ton
from the end of September.
In East China, the current aluminum alloy spraying old material around 11100, broken bridge material around 10100, cans mainstream around 9400, pure can high price up to 9700-9800 yuan
.

In terms of the market, the price of goods holders is strong, the supply of low-price goods in the market is small, the source of cans, machine aluminum and other sources are still selling well, and there are many merchants looking for goods in the market; The recent performance of scrap aluminum profiles has been relatively stable, and the holder has maintained a normal shipment rhythm; In terms of manufacturers, the purchasing sentiment is acceptable, and some manufacturers still receive goods at higher prices due to lack of goods
.
In addition, it is understood that the import restrictions on scrap aluminum will be relaxed in November, and it is necessary to be vigilant against the impact
of scrap aluminum imports on the domestic scrap aluminum market.

5.
Market outlook

At present, the market is still more cautious about the trend of the macro picture, and the second outbreak of the epidemic and the approach of the US election have had a certain negative impact on aluminum prices; However, as far as China is concerned, although the profits of aluminum enterprises have narrowed since October, the overall release of production capacity is still increasing, but with the gradual recovery of downstream demand, domestic inventory has not yet shown obvious accumulation, and the overall social library remains low; In the short term, under the support of spot and low inventory, Shanghai aluminum or continue the trend of volatility and stability, and then with the gradual entry of the traditional off-season, if the inventory enters the accumulation cycle again, aluminum prices still have a certain possibility of falling, the main force of Shanghai aluminum can pay attention to the range of 1.
44-15,000 oscillations, it is expected that in November aluminum prices are still difficult to break through the 15,000 mark
.

The recent delay in the launch of a new stimulus package in the United States, while the current outbreak of the epidemic is more serious than the first one, and market confidence has suffered a heavy setback; In the short term, there are many negative factors in the macro area, and Lun aluminum may continue to run weakly, and it is necessary to continue to pay attention to the development trend of the epidemic and the economic stimulus plans of various countries, and it is expected that Lun aluminum in November will fluctuate in the 1760-1840 range
.