September 2020 cable raw materials (aluminum) monthly report

First, the fundamentals

1.
According to data from the National Bureau of Statistics, base metal production rebounded across the board in August, recovering from the impact of the new crown epidemic
.
Primary aluminum (electrolytic aluminum) production in August increased by 5.
5% year-on-year to 3.
171 million tons, and primary aluminum (electrolytic aluminum) production from January to August increased by 2.
3% year-on-year to 24.
304 million tons
.

2.
China's alumina production in August rose 6.
6% year-on-year to 6.
449 million mt, and alumina production from January to August fell 4% year-on-year to 47.
686 million mt
, data released by China's National Bureau of Statistics on Tuesday.

3.
According to data from the General Administration of Customs, the export of unwrought aluminum and aluminum products in August 2020 was 395,400 tons, compared with 373,000 tons in July, an increase of 5.
89%
from the previous month.
Compared with the export volume in August 2019, it decreased by 70,600 tons, a year-on-year decrease of 15.
15%.

From January to August 2020, the cumulative export of unwrought aluminum and aluminum products was 3.
1347 million tons, down 20.
40%
from 3.
938 million tons in January-August 2019.

4.
The total amount of national scrap metal import approvals in the twelfth batch is 260230 tons, including 136335 tons of copper scrap, 121285 tons of aluminum scrap and 2610 tons
of scrap steel.
After this round of import approval quota, there are currently 12 batches in 2020, and the total approved import volume of aluminum scrap and scrap is 818664 tons
.

5.
According to customs statistics, the import volume of primary aluminum in July was 184,600 tons, and the import volume in August reached 247,000 tons, an increase of 33.
8% month-on-month and 38.
7 times
year-on-year.
The surge in imports in August was in line with expectations, as import profits peaked in July, and August imports came from import operations
in July, including shipping schedules.
The electrolytic aluminum import window closed in mid-August, and imports are expected to decline
in September.
As of September 28, the import profit of electrolytic aluminum was about 330 yuan / ton, and the inventory of Shanghai Free Trade Zone was 51,600 tons
.
It is expected that imports in the fourth quarter are expected to fall to single digits, and when the price spread widens slightly in the peak season, goods from bonded warehouses will gradually flow in
.

6.
According to data released by the General Administration of Customs of China, China's bauxite imports from January to July 2020 were 69.
338 million tons, a year-on-year increase of 9.
8%, and the monthly import volume in July reached 11 million tons, a record high
.
Among them, Guinea is the main source of domestic bauxite imports, accounting for 49%.

Australia and Indonesia ranked second and third in terms of imports, accounting for 32% and 17%
respectively.

Second, the market review

After entering the peak season, domestic consumption has not seen a great improvement, the overall performance of the fundamentals is not good, Shanghai aluminum fluctuates more frequently in September, the main force rose to 14740, the lowest fell to 13670 yuan / ton, as of the end of the month, the main force of Shanghai aluminum closed at 14145, down 395 from August, down 2.
72%.

In terms of external trading, affected by the second outbreak of foreign epidemics, the center of gravity of Lun aluminum in September has moved down, and the sharp ups and downs of the US dollar index in the month have caused the trend of aluminum prices to fluctuate slightly, as of the end of the month, the overall fluctuated in the 1730-1820 range, and the lowest intraday fell to 1724 US dollars / ton, down about
1.
1% from August.

In terms of the market, the spot market in September was relatively abundant, the holders firmed the selling price, and the consumption in the downstream market improved, which drove the demand, but due to the unstable market, the receipt of goods was relatively cautious, mainly on demand, and traders traded more actively to drive market transactions
.

East China: affected by the trend of US dollars and crude oil, aluminum prices fluctuated more sharply in September, especially in the second half of the year, there was a sharp rise and fall in the market, coupled with the slow destocking of electrolytic aluminum inventory, the price support weakened, the overall performance of the center of gravity of aluminum prices in September moved down, the operating range was 14250-14810 yuan / ton, as of September 30, East China spot aluminum prices were between 14660-14700 yuan / ton, down 80 yuan / ton
from the end of August.

South China: This month's spot aluminum price fluctuated slightly, the average price of spot aluminum in South China at the end of the month was 14920 yuan / ton, down 1.
06% from the beginning of the month, due to the rekindling of the overseas epidemic in the middle of the month, and the strengthening of the US dollar, the fall of Shanghai aluminum put spot aluminum prices under pressure, but the end of the month coincided with the National Day small holiday, the market bought the spot aluminum price slightly resisted, recovered some of the previous decline, from the transaction situation, this month's spot transaction is acceptable
.
As of the end of the month, spot aluminum stocks in South China were 167,000 tons, down 08,000 tons, or 4.
57%,
from the beginning of the month.

3.
Inventory

As of the end of September, LME aluminum stocks were 1466925 tons, down 87,450 tons, or 5.
63%, from the end of August, but due to the unstable trend of the US dollar, the price of London aluminum fluctuated sharply
in September.

Unlike July, domestic Shanghai aluminum inventories showed an upward trend in August, climbing for four consecutive weeks, and as of the end of September, Shanghai inventories were 230017 tons, down 21,020 tons, or 8.
4%,
from the end of August.
Domestic electrolytic aluminum social inventory (including SHFE warehouse receipt): Shanghai 122,000 tons, Wuxi 23.
6 tons, Nanhai 163,000 tons, Hangzhou 72,000 tons, Gongyi 67,000 tons, Tianjin 47,000 tons, Chongqing 03,000 tons, Linyi 06,000 tons, consumption of aluminum ingot stocks totaled 716,000 tons, down 24,000 tons
from last Thursday.

Fourth, the waste market

In September, the scrap aluminum market transaction improved significantly; Aluminum rod and aluminum profile manufacturers have a high enthusiasm for receiving goods, an increase in seeking goods in the market, and the price of scrap aluminum profiles is firm; It is understood that the current supply of some recycled aluminum plants is tight, raw materials can not keep up, and even the situation of raising prices and receiving goods, making the scrap aluminum market can and machine aluminum and other sources are more sought-after, overall, the market transaction in September is more active
.

September scrap aluminum prices are different from spot aluminum ingots, the main reason is caused by the price increase of downstream recycled aluminum alloys, the most obvious increase is cans and machine aluminum, as of the end of September, the mainstream price of machine aluminum in South China has risen to 10400 yuan / ton, about 500 yuan higher than the end of August, aluminum wire around 12800, basically stable
compared with last month.
East China is currently sprayed around 10900 aluminum alloy, 9800 for broken bridge material, and 9500 for cans
.

At present, the price of scrap aluminum is at a recent high, and after the holiday, due to the shortage of manufacturers, the price may still be firm, but it is not recommended to chase too high, beware of a fall, which is conducive to reducing inventory
.

5.
Market outlook

The current peak season consumption expectations have not yet been fulfilled, although the consumption of automobiles and aluminum processing has improved, but the grid investment has not improved, in the short term, demand is still unable to match the subsequent continuous increase in supply, Shanghai aluminum continues to bear upward pressure is more obvious; In addition, the impact of macro bearishness on aluminum prices can not be ignored, on the whole, before the peak season consumption has not seen substantial improvement, it is expected that aluminum prices in October may still be under pressure at the 15,000 mark
.
In the short term, the Fed's new round of economic stimulus plan has strengthened the market's confidence in economic recovery, and the negative sentiment caused by the epidemic has eased, but in the long run, due to the continuous conflict between countries and the spread of the overseas epidemic has not been substantially alleviated, macro bearish factors still exist, and it is expected that the external trend in October may continue to be volatile
.