January 2022 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 December 2021 was 3.
109 million tons, down 4.
0% year-on-year, an increase of 8,000 tons from the previous month; the cumulative output from January to December was 38.
503 million tons, an increase of 4.
8%
year-on-year.
Despite limiting energy consumption at factories to meet climate goals, China's aluminum production for the whole year of 2021 reached a record high
of 38.
5 million mt.

2.
According to data from the National Bureau of Statistics, China's alumina output in December 2021 was 6.
243 million tons, a year-on-year increase of 1.
1%; The cumulative output from January to December was 77.
475 million tons, a year-on-year increase of 5.
0%.

From the perspective of provincial data, the top three alumina production in 2021 are Shandong, Shanxi and Guangxi, with alumina production of 27.
4894 million tons, 19.
595 million tons and 11.
3345 million tons respectively, with a total output of 58.
4189 million tons, accounting for 75.
4%
of the country's total output.

3.
According to data from the General Administration of Customs, the export volume of unwrought aluminum and aluminum products in December 2021 was 563,000 tons, an increase of 10.
53% month-on-month and 23.
43%
year-on-year.
Exports hit a new high
since January 2019.
From January to December 2021, the cumulative export volume of unwrought aluminum and aluminum products was 5.
1691 million tons, an increase of 15.
7%
over last year.

4.
According to data from the General Administration of Customs, China's imports of alumina (alumina, except artificial corundum) in December were 255,243.
30 tons, an increase of 61.
66% month-on-month and a year-on-year decrease of 37.
52%.

Among them, Australia was the largest supplier, importing 199,544.
84 tons from the country in the month, an increase of 219.
27% month-on-month and a year-on-year decrease of 39.
52%.

5.
According to customs data, from January to December 2021, China imported 107.
416 million tons of bauxite, a year-on-year decrease of 3.
7%.

From January to December 2021, China imported 3.
327 million tons of alumina, a year-on-year decrease of 12.
6%; The export of alumina was 120,000 tons, a year-on-year decrease of 22.
4%.

From January to December 2021, China imported 1.
58 million tons of electrolytic aluminum, a year-on-year increase of 48.
5%; The export of electrolytic aluminum was 07,100 tons, a year-on-year decrease of 27.
1%.

6.
In order to reduce the pressure on energy costs, following the announcement of a 3% reduction in production by Aluminium Dunkerque Industries, Europe's largest aluminum smelter, the second largest aluminum plant in Europe, Alcoa (AA), Spain's San Cipian Works plant, will also be suspended for two years, and the Dutch aluminum plant Aldel, the Slovalco aluminum plant in Slovakia, and Trimet Aluminum in Germany have announced corresponding production reduction plans
.
Domestic Shanxi, Yunnan and Guangxi regions have successively begun to resume production plans, and it takes time to produce production, and there is no change in short-term domestic supply
.

Second, the market review

In January, Shanghai aluminum maintained a high and strong trend, although there was a shock adjustment during the session, but the overall trend was still biased to the upside, the main force rose to 21930, a monthly increase of 7.
7%; After the aluminum price gradually stabilized the 20,000 mark within the month, it gradually climbed under the support of supply and demand and inventory; Among them, Indonesia announced the suspension of bauxite exports and the turmoil on the Russian-Ukrainian border, and the supply of Russian aluminum may also be interfered with by it, and the supply side of the aluminum market has tightened again under the comprehensive impact, and the tight balance between supply and demand may continue, promoting the upward trend of aluminum prices; In addition, the Fed's short-term interest rate remains unchanged, which is relatively in line with market expectations, short-term market risk aversion fades, and aluminum prices gradually recover
.

In terms of the market, the pre-holiday stocking of downstream enterprises in the first half of the year drove some demand, and electrolytic aluminum inventories fell slightly, but with the gradual holiday of downstream enterprises in the middle and late months, market demand weakened, inventory accumulation, and under the influence of the epidemic in some areas, transportation was affected, and transactions fell significantly
.

East China, in the first half of the year, due to the energy crisis in Europe, electrolytic aluminum companies continue to reduce production, the market speculation atmosphere is heavier, giving aluminum price support, electrolytic aluminum prices continue to rise; With the decline of the hype atmosphere, the accumulation of domestic electrolytic aluminum stocks, and the urgent deterioration of the situation in Russia and Ukraine in the second half of the year, aluminum prices fell into a shock correction, giving up some of the gains
.

South China, the price of aluminum ingots in South China rose first and then fell in January, giving up some of the gains, as of the end of the month, the price of aluminum ingots in South China was 21870-21970 yuan / ton, up 1290 yuan / ton from the end of December, an increase of 6.
25%; Local downstream enterprises have a slightly later holiday than East China by 3-5 days, and the transaction volume has also declined
compared with December.

3.
Inventory

LME aluminum inventories in January 2022 continued the downward trend since late December last year, with LME aluminium stocks at 823525 tonnes by the end of January, down 115675 tonnes from the end of last month; Falling inventories boosted prices, and aluminum fluctuated upward during the month, once again standing at the 3,000 mark
.
In January 2022, Shanghai aluminum inventories showed a downward trend, and as of the end of January 21, Shanghai aluminum inventories were 282703 tons, down 40,866 tons from the end of December; In addition, according to data, as of January 27, the inventory of electrolytic aluminum in 8 mainstream consumption areas in China was 726,000 tons, and it has entered the stage of accumulation of inventory
.

Fourth, the waste market

In January, the scrap aluminum market continued the rise in December last year, and the price of scrap aluminum rose by about 500 yuan, and the current mainstream of local machine aluminum is around 15900 and cans are around 14100; East China, North China due to the holiday of enterprises than the South China market is generally earlier, scrap aluminum prices are slightly inferior, the current East China spray paint price is about 15400, bright line 17800-18000, cans 13800-13900, the increase is only 200-300 yuan
.

In January, market transactions were mostly concentrated in the first and middle of the year, mainly manufacturers and medium and large freight yards, the market circulation was tight, and the market transaction was cold in the second half due to the holiday of manufacturers
.
It is understood that the freight yard is mostly concentrated on the holiday around the 15th, while the recycled aluminum enterprises are mostly concentrated on the 20-25th holiday; Resumption of work after the holiday: The resumption of work by enterprises is mostly concentrated in two time periods, one is around February 8, and the other is after
the Lantern Festival.

After the holiday, the tight supply situation of the scrap aluminum market is expected to intensify, the market supply exceeds demand to support the price trend, and it is expected that the scrap aluminum market may rise after the holiday, and it is recommended that the inventory yard can appropriately reduce the inventory
.
Pay attention to the overseas energy crisis and the subsequent development
of the situation between Ukraine and Russia.

5.
Market outlook

In January, Shanghai aluminum maintained a high and strong trend, with a monthly increase of 7.
7%.

Aluminum prices outside the holiday first fell and then rose, the Fed interest rate meeting expected hawkish expectations led to continued price suppression, after the non-farm payrolls data was strong, the market expected the probability of the Fed raising interest rates by 50 basis points in March to be close to 50%.

After the meeting landed, the market attention returned to the logic of supply and demand imbalance, and aluminum prices fell by 1.
2%
throughout the holiday.
Low inventory background and accumulation height is not expected, strong price support, short-term Shanghai aluminum to maintain high volatility, on the whole, macro and fundamental together, February aluminum prices or maintain the trend of first rise and then fall, the overall fluctuation range can pay attention to 21000-22500
.