September 2021 cable raw materials (aluminum) monthly report

First, the fundamentals

1.
According to data from the Bureau of Statistics, China's primary aluminum (electrolytic aluminum) output in August was 3.
16 million tons, an increase of 0.
4% year-on-year; From January to August, primary aluminum production was 26.
08 million tons, an increase of 8.
3%
year-on-year.
Primary aluminium production fell for the fourth straight month in August, hitting its lowest level in more than a year, as production curtailments and power cuts in key production regions tightened
supply.

2.
According to data from the Bureau of Statistics, China's alumina output in August was 6.
466 million tons, down 1.
1% year-on-year; The cumulative output from January to August was 52.
245 million tons, an increase of 8.
7%
year-on-year.
In August, the domestic alumina price rose rapidly, and the northern alumina plant increased production, but the increase in production was relatively limited
.

3.
In August 2021, China's exports of unwrought aluminum and aluminum products were 490,300 tons, an increase of 4.
53% month-on-month and 23.
99%
year-on-year.
From January to August, the cumulative export volume of unwrought aluminum and aluminum products was 3.
5754 million tons, an increase of 14.
2%
over last year.

4.
According to data from the General Administration of Customs, China's alumina imports in August 2021 were 394,100 tons, down 25.
19% month-on-month and up 49.
85% year-on-year; The export volume of alumina was 0.
6 million tons, down 88.
37% month-on-month and 81.
99% year-on-year; Net imports of alumina were 388,200 tons, down 18.
36%
month-on-month.

5.
As of August 30, the total domestic social inventory of electrolytic aluminum was 753,000 tons, which was at a historically low level
.
From the trend of inventory, the decline in aluminum inventories has slowed down significantly, but it has not yet shown any signs of
rebound.
From the perspective of inventory laws in previous years, the change of electrolytic aluminum social inventory is not too strong cyclical, but the change trend of inventory is relatively smooth: once it begins to rise or fall, it often lasts for several months, and in the third and fourth quarters, the probability of inventory continuing the downward trend is relatively high
.

6.
According to data released by the International Aluminum Association, global primary aluminum production fell to 5.
699 million tons in August, and the revised output in July was 5.
733 million tons
.
Among them, China's primary aluminum production fell to 3.
299 million tons in August, and the revised output in July was 3.
327 million tons
.

Second, the market review

In September, the rally of Shanghai aluminum continued, the pace of rise accelerated, the highest intraday main rise to 23895, almost broke the 24,000 mark, but in the second half of the month under the favorable digestion ushered in a shock correction; as of the end of the month, the cumulative increase from the previous month was nearly 6.
7%; The factor that has always guided the price trend during the month is undoubtedly the increase in the problem of power and production restrictions; With the gradual spread of power rationing nationwide, the total production capacity of aluminum has been limited to more than 2 million tons, and the subsequent value may further increase, in addition, downstream consumer processing enterprises are also facing power rationing and production stoppage, resulting in the "golden nine silver ten" peak season no longer, the overall consumption performance is weak, and inventory has continued to accumulate hidden dangers
.

In September, Lun Aluminum continued the rally of the previous month, and the rise was further expanded, and the highest intraday high broke through to reach the $3,000 mark, and as of the end of the month, it was up nearly 7.
2%
from the previous month 。 During the month, global aluminum demand continued to increase, and Lun aluminum inventories were declining, and the decline was in the forefront of nonferrous metals, supporting the market's bullish confidence; In addition, in the Fed meeting, Powell proposed that there will be no short-term interest rate hike expectations, further boosting bulls' confidence, driven by the capital superimposed on macro sentiment, Lun aluminum rushed higher after maintaining volatility around 2900, short-term consideration of the good out, continue to rise is blocked, but the lower 2850 support still exists, or the high range oscillation, you can pay attention to the shock range 2820-2920 range
.

In terms of the market, the overall supply performance of the market in September was abundant, but the traditional "Golden Nine" peak season fell short, affected by the record high aluminum price, as well as the power rationing of downstream enterprises, etc.
, market demand weakened, downstream stocking situation was not much, dragging down market transactions, aluminum plate, aluminum strip, profiles and other enterprise orders decreased; Traders are only enthusiastic about entering the market, and the overall market transaction is average
.

East China, under the background of "dual control", the government increased the containment of the "two highs" phenomenon, production restrictions and shutdowns in many places were frequent, the supply side was tightened, the market bullish atmosphere was stronger, aluminum prices continued to rebound, repeatedly hit new highs, East China spot aluminum rose to 23440 yuan / ton, and then due to various reasons such as dumping, slightly falling, as of the end of the month, East China spot aluminum reported 22610-22650 yuan / ton, up 1390 yuan / ton from the end of August, an increase of 6.
55%.

South China, South China aluminum ingots still maintained an upward trend in September, as of the end of September, the price of aluminum ingots in South China was reported between 23020-23120 yuan / ton, up 1490 yuan / ton from the end of August, an increase of 6.
9%; Enterprises in Guangdong are more obviously curtailed, and some enterprises are even required to cut power for 3 days a week, which has an impact on production, the market needs to be reduced, and the peak season transaction is affected
by power cuts.

3.
Inventory

In terms of inventory, LME aluminum stocks continued their downward trend in September, and by the end of September, LME aluminum stocks were 1256450 tons, down 78,225 tons from the end of August, a decrease of 5.
86%.

Supported by falling inventories, Lun Aluminum reached a new high in September, rising as high as the $3,000 mark
.
As of September 24, the previous aluminum inventory was 229847 tons, down about 19,000 tons, or 7.
66%,
compared with the end of August.

Fourth, the waste market

In September, the price of scrap aluminum rose sharply, with an increase of more than 1,000 yuan in South China, and an increase of nearly 2,000 yuan / ton in raw aluminum; At present, the mainstream of local machine aluminum is around 17,000; other regions have also risen to varying degrees, and the rise of raw aluminum is outstanding, at present, East China aluminum alloy spraying old material around 16,500, broken bridge material around 15,200, aluminum wire about 20,000, clean machine aluminum mainstream around 17,500, there has been a sharp increase
.

In terms of recycled aluminum alloy ingots, silicon has skyrocketed under the impact of the shutdown of production in many regions and the imbalance between market supply and demand
.
The soaring price of silicon, as well as the continuous increase in the price of electrolytic aluminum, directly led to the sharp rise in the price of aluminum-silicon alloy ingots, the pressure on the cost of raw materials of manufacturers increased, and the price of ADC12 aluminum alloy ingots once exceeded 24,000, and the increase since September has reached 3,000 yuan / ton, and downstream die-casting enterprises are miserable
.
The sharp rise in silicon has also led to obvious price differentiation of raw aluminum and cooked aluminum, aluminum mills consider the cost reasons, the source of raw aluminum is more favored, and even there is a rush phenomenon, while the source of cooked aluminum chooses to receive goods at a low price, and some small and medium-sized smelting enterprises even stop the phenomenon of buying cooked aluminum
.

In terms of aluminum profiles, the price is too high, downstream processing enterprises do not accept it, and orders are significantly reduced; It is understood that due to price problems, Hubei and other aluminum profile manufacturers in control of receipts, maintenance of normal production needs, inventory is not much
.
Production restrictions, power restrictions in many places, and the upcoming heating season, the supply side has a trend of continued tightening; In the case of imbalance between supply and demand, silicon prices may remain strong; Under multiple benefits, or limit the downward space of scrap aluminum, there is still an upside possibility
after the short-term scrap price adjustment.

5.
Market outlook

The overall aluminum price showed a high upward trend during the month, but the increase slowed down in the second half of the month, and the aluminum price showed a moderate correction; The main contract rose as high as 23895, Narrowly broke the 24,000 mark, breaking through a new high again; short-term macro influence weakened, inventory accumulation and power rationing under the influence of supply and demand double weak situation intensified, or there is a certain negative impact on aluminum prices, there is a possibility of weak operation; but in the long run, under the gradual recovery of subsequent downstream demand, aluminum prices still have the possibility of upward; operationally it is recommended that pre-holiday cargo merchants can be light warehouses and ship at high prices; downstream on-demand small amounts of stocking; middlemen can wait and see, it is expected that aluminum prices will continue to fluctuate in October, paying attention to the fluctuation range of 22400-23500
。