October 2021 cable raw materials (aluminum) monthly report

First, the fundamentals

1.
According to data from the National Bureau of Statistics, in September 2021, China's electrolytic aluminum production was 3.
08 million tons, down 2.
1%
year-on-year.
The cumulative output from January to September was 29.
15 million tons, a year-on-year increase of 7.
2%.

2.
According to data from the Bureau of Statistics, in September, China's alumina output was 6.
548 million tons, down 1.
4% year-on-year; From January to September, the output of alumina was 58.
839 million tons, a year-on-year increase of 7.
6%.

The output of Shandong Province was 2.
2396 million tons, the output of alumina in Shanxi Province was 1.
7749 million tons, and the output of alumina in Henan Province was 898,400 tons
.

3.
According to data from the General Administration of Customs, the export volume of unwrought aluminum and aluminum products in September 2021 was 492,000 tons, an increase of 0.
35% month-on-month and 15.
36%
year-on-year.
From January to September 2021, the cumulative export volume of unwrought aluminum and aluminum products was 4.
067 million tons, an increase of 14.
3%
over the previous year.

4.
According to data from the General Administration of Customs, China's alumina imports in September 2021 were 361,400 tons, down 8.
31% month-on-month and up 1.
88% year-on-year; From January to September 2021, China's alumina imports reached 2.
6937 million tons, down 9.
42%
year-on-year.
The export volume of alumina was 0.
36 million tons, down 40.
51% month-on-month and 13.
93% year-on-year; From January to September, the cumulative export volume of alumina reached 102,400 tons, down 28.
77
years from the same period last year.

5, foreign media news, a survey shows that with the global aluminum supply shortage next year to a certain improvement, aluminum prices will fall
from the current high.
The 29 analysts involved in the survey expect the London Metal Exchange (LME) spot aluminium to average $2,695 per tonne in 2022
.
Commodities analysts at Julius Baer Zurich said aluminum prices had moved away from fundamentals
.
Although supply and demand are tightening, especially because of power outages, it is believed that the impact of power outages and production restrictions has been exaggerated
.

6.
Foreign media news, a survey shows that the global aluminum supply situation will improve in 2022, although there is still a gap
between supply and demand.
On average, the 29 analysts who participated in the survey expect the global aluminum market to reduce to 396,000 tons in 2022, only about 44% of the expected supply gap of 893,000 tons in 2021
.
Three-month aluminium on the London Metal Exchange has risen nearly 50 percent so far this year and hit its highest price in 13 years, mainly because of a shortage
of aluminium supply.
The gap between supply and demand has widened
due to strong global demand for aluminium and power shortages that have curtailed production in the energy-intensive aluminium smelting industry.

Second, the market review

In October, aluminum prices showed a sharp downward trend, and the highest rise of domestic Shanghai aluminum rose above 24,000 and then opened a sharp dive due to the influence of policies, and the main force of Shanghai aluminum fell to 19200, and as of the end of the month, it fell nearly 11.
5%
from the previous month.
The main factor that caused the rapid decline in prices within the month was undoubtedly a series of policies of the state to control coal prices, and as a related variety, the cost of aluminum was also greatly collapsed by its impact, and the benefits of dual control of electricity and energy consumption were gradually destroyed, and the support benefits below the aluminum price weakened, resulting in a continuous decline in prices
.
In the short term, due to the gradual destruction of the favorable drive, coupled with macro policies to curb energy prices, aluminum prices may continue to be weak and volatile, and the main force below the focus is on 19,000 support
.

This month, Lun aluminum showed a trend of rushing back down, rising above 3200 intraday and then quickly pulling back, and the lowest fell to $2602 in the month, down nearly 4.
5% from the previous month; Although the current inventory of London aluminum continues to decline and is approaching a new low, the Fed's interest rate hike expectations have further strengthened in November, and market concerns have intensified
.
In addition, affected by the general decline in energy prices, aluminum prices show a sharp downward trend, short-term capital long and short momentum or not completely out of the market, it is difficult for aluminum prices to rebound effectively, next month can continue to pay attention to the Fed's further policy control, if the easing policy is tightened, then the price of aluminum does not rule out the possibility
of further decline.

In terms of the market, the demand for the "Silver Ten" peak season in October fell short, the price instability was superimposed on the impact of power cuts and production restrictions of downstream enterprises, the demand was not as good as the same period last year, and the enthusiasm of traders to enter the market was also reduced.

East China: After the National Day, due to the "dual control" and the impact of production cuts and production restrictions, electrolytic aluminum has a wave of rising market, East China spot aluminum price 24260 yuan / ton, but since the end of the year, the state has increased control of energy prices, news is frequent, the cost of electrolytic aluminum has a greater impact, the market has panic, electrolytic aluminum prices should fall, the high level falls, spot aluminum prices fell to around 19300, as of October 29, East China spot aluminum prices in 20180-20220 yuan / Between tons, it fell by 2430 yuan / ton from the end of September, a decline of 10.
74%.

South China: South China aluminum ingots rose first and then fell in October, and continued to decline after giving up all the gains in the second half of October, as of the end of October, the price of aluminum ingots in South China was reported between 20430-20530 yuan / ton, down 2410 yuan / ton from the end of September, down 10.
53%; The market is unstable, the downstream wait-and-see atmosphere is heavier, and the purchase of batches is mainly
low.

3.
Inventory

In terms of inventory, LME aluminum stocks continued to decline in October, and the decline rate accelerated from September, as of the end of October, LME aluminum stocks were 1051350 tons, down 186,950 tons from the end of September, a decrease of 15.
1%; Inventory prices have obvious support for the price of Lun aluminum, which rose first and then declined in October, with the highest climbing to 3229 yuan / ton
.
Different from Lun aluminum inventory, the domestic Shanghai aluminum inventory in October showed accumulation phenomenon, as of October 22, the last period of aluminum inventory was 269582 tons, an increase of 35,776 tons from the end of September, an increase of 15.
3%.

Fourth, the waste market

In October, the price of scrap aluminum followed the sharp decline of aluminum ingots, with the decline in South China mostly concentrated at 1500 yuan / ton, and the mainstream price of machine aluminum was around 15600; Other regions fell mostly in 1000-1500 yuan / ton, the current 6-meter white material in East China 17000, 6-meter paint material 15700, broken bridge aluminum 13700, aluminum wire around 18,000, can around 13,200, all significantly lower than the end of September
.

In October, the market was unstable, ups and downs, panic appeared in the market, some freight yards caused losses due to early stockpiling, prices plummeted in the second half of the year, some yards and manufacturers stopped collection, market prices were chaotic, and the quotation range widened
.
Due to the unstable market, the inventory of manufacturers is generally not much, and normal production is maintained; In addition, as the price of silicon falls, the price of raw aluminum and cooked aluminum gradually returns to the normal range difference
.

Under the influence of the bearish end of raw materials, aluminum prices still have the possibility of downward, short-term scrap aluminum prices are still weak, it is recommended that holders fast forward and fast out operation, downstream recycled aluminum manufacturers according to orders and inventory conditions on demand replenishment can be, the market is unstable, stockpiling needs to be cautious
.

5.
Market outlook

From a fundamental point of view, the continuous rise in aluminum prices in the early stage and the acceleration of the pace of social accumulation indicate that demand is under excessive pressure, the gap on the supply side has basically turned to a state of excess, and it is difficult to form effective support below aluminum prices, and the market focus has shifted from overseas energy shortages and domestic power cuts and other news to the impact of the deep fall in coal, dominated by bearish sentiment, aluminum prices may maintain a weak trend
in the short term.
From the perspective of industrial profit distribution, it is undoubtedly a good news, and the sharp correction in aluminum prices has compressed upstream profit margins to a certain extent and transferred to downstream enterprises, the key lies in the recovery of downstream demand and the degree of
inventory release.
It is expected that in November, fundamentals will move towards a supply and demand pattern with a declining supply margin and a better demand margin, while the market's expectation of the duration of pressure on coal will exceed the impact of supply and demand, and the new scale of power curtailment may become the fuse to guide the price turn
.