May 2019 cable raw materials (aluminum) monthly report

First, the fundamentals

1.
Driven by the recovery of profits of electrolytic aluminum enterprises, the operating rate has improved, data show that in April 2019, China's electrolytic aluminum output was 2.
9299 million tons, with an average daily output of 97,700 tons and an annualized output of 35.
6471 million tons; an increase of 15,000 tons per day
.
It is expected that electrolytic aluminum production will still show an upward trend
in May.

2.
The National Bureau of Statistics released alumina production data for April 2019, which showed that China's alumina production in April increased by 4.
2% year-on-year to 6.
276 million tons
.
Alumina production in April hit a high since June 2017, but considering the environmental impact of Shanxi, Jiaokou Xinfa 2.
8 million tons of alumina is gradually stopping production, and Huaqing Aluminum has stopped production of 400,000 tons of alumina, a total of 3.
2 million tons of alumina production capacity has accounted for 4.
5%
of the country's 71.
26 million tons of alumina operating capacity at the end of April.
Nearly 5% of the country's alumina production capacity will be directly affected, and alumina production in May is expected to decline
compared with April.

3.
According to customs data, the export volume of unwrought aluminum and aluminum products in April was 498,000 tons, an increase of 10.
4% year-on-year, a decrease of 48,000 tons compared with 546,000 tons in March, mainly due to the continuous rise
of the Shanghai-London ratio.
From January to April 2019, China's exports of unwrought aluminum and aluminum products totaled 1.
94 million tons, a year-on-year increase of 12.
8%.

Although exports fell slightly in April compared with March, they remained at an absolute high overall, and strong export data played an important role
in alleviating domestic gluttony.

4.
China's scrap metal imports rose 40% month-on-month to 350,000 tonnes in April, the highest monthly level since December 2018
, according to data released by the General Administration of Customs of China.
Among them, scrap aluminum imports reached 150,000 tons, an increase of 15.
4% month-on-month, mainly affected by the ban on scrap metal imports that began in July
.

Second, the market review

This month, the trend of the Shanghai aluminum index is slightly strong, and the market trading is cautious due to the results of Sino-US trade measures at the beginning of the month, and the Shanghai aluminum fell below the 14000 mark intraday, and the lowest fell to 13910; Domestic destocking performance is good, and environmental protection problems such as leakage of red mud dam filtrate from alumina plants in Xiaoyi, Jiaokou and other areas in Shanxi, some alumina plants in Shanxi are facing forced shutdown, involving an annual production capacity of about 6.
6 million tons
。 Benefiting from this, Shanghai aluminum performed strongly, returning to the 14000 mark, and successfully stabilized the support of this mark, climbing to 14395 intraday, but Sino-US trade tensions are still bearish aluminum prices, but the fundamentals are positive.
From the trend point of view, the domestic destocking trend is good, the strong trend of Shanghai aluminum shock remains unchanged, but still pay attention to macro negative factors, as well as weak downstream demand, aluminum prices may have a big rise in the market, it is expected that the Shanghai aluminum shock range market in June will remain unchanged, temporarily pay attention to the 14,000 mark support
.

In the external market, Lun aluminum fluctuated and fell this month; At the beginning of the month, due to the large increase in Lun aluminum inventory, resulting in a weak trend of Lun aluminum, intraday down to 1784 US dollars, a new low in 28 months, and then Lun aluminum inventory returned to the downward trend, as well as domestic aluminum price support, Lun aluminum once again returned to the $1800 mark, the highest climbed to 1871 US dollars, but lack of substantial benefits, obviously limited gains, Sino-US trade conflict related concerns lingering, macro bearish once again made Lun aluminum trend weak, intraday new low, The lowest down to 1765.
5 US dollars, from the trend point of view, lack of favorable boost, and macro short, short-term aluminum price shock trend is difficult to change, it is expected that the overall fluctuation range of Lun aluminum in June is 1720-1880 US dollars
.

Market: East China market is abundant, the overall performance of supply exceeds demand, but the trading volume in May has improved compared with April, first, traders, the price of electrolytic aluminum in May due to the trade war and alumina impact fluctuations are relatively large, middlemen are still active in entering the market, trading is more active; In the downstream, corporate consumption has been boosted compared with April, and the number of goods entering the market has increased, but due to price instability, more on-demand purchases have been maintained; The overall market transaction is acceptable
.

East China: Due to the cost end of Jiangxi alumina environmental protection event speculation moved sharply, and the electrolytic aluminum destocking state is good boost, electrolytic aluminum continued to fluctuate at a high level in May, East China spot aluminum operating range of 14000-14400, near the end of the month there was a slight decline, giving up the gains, but the overall around 14,100 still supported; as of the end of May, East China spot aluminum around 14180 yuan / ton, basically stable
from the end of April.

South China: South China aluminum ingots maintained high volatility in May, the operating range was 14300-14800 yuan / ton, as of the end of the month, the price was around 14530, up 50 yuan from the end of April, slightly better than East
China.
The local market is still abundant, intermediaries are optimistic about the future market, trading is more active, downstream is mainly on-demand buying, and the transaction has also improved compared with April
.

3.
Inventory

Since the end of April, Lun aluminum inventory has increased sharply, from 1.
02 million tons to 1.
275 million tons, an increase of 25% in just two weeks; Growth then slowed and re-entered a downward trend, with LME aluminum stocks reaching 1.
164 million mt as of May 30, up 8.
4% from the beginning of
the month.
As of May 24, the aluminum inventory of the Shanghai Exchange continued to show a downward trend, as of May 24, the aluminum inventory of the Shanghai Exchange was 539,000 tons, a decrease of 83,000 tons, or 13.
29%,
from the end of April.
Domestic social stocks, as of May 30, Shanghai 251,000 tons, Wuxi 434,000 tons, Hangzhou 98,000 tons, Gongyi 82,000 tons, Nanhai 255,000 tons, Tianjin 55,000 tons, Linyi 10,000 tons, Chongqing 27,000 tons, consumption area aluminum ingot inventory total 1.
212 million tons
.
The domestic destocking trend is good, and the trend of Shanghai aluminum is slightly firm
.

Fourth, the waste market

The price of scrap aluminum in April rose more obviously than in March, and the enthusiasm of the holders to ship was higher, but the price was mostly shipped, the overall supply of the market was abundant, scrap aluminum profiles and aluminum wire were still favored by the market, and the price rose positively; The supply of hybrid aluminum, cans, aluminum chips, and aluminum shavings is inferior, mainly because of taste and purity problems; In addition, it is understood that in the early half of the year, recycled aluminum and aluminum rod manufacturers stocked more actively, but later with the high price of raw materials, downstream recycled aluminum alloy ingot prices followed the slow rise and other reasons led to a narrowing of profits, manufacturers began to control the amount of receipts, the price pressure was more obvious, and the overall market transaction was still more active
than in March.

In April, the price of scrap aluminum followed the upward movement of aluminum ingots, and the increase in South China was obvious, mostly at 150-300 yuan, and as of the end of April, the mainstream of aluminum in South China was around 10400; Other regions are slightly inferior, mostly around 100 yuan, the current aluminum line in East China around 11900, cans around 8800, pure can price can add 100-200 yuan / ton; According to the demand of merchants, the price range of scrap aluminum materials has widened, and the mainstream spray coating is around
10200-10400.

Post-holiday market forecast: aluminum fundamentals slightly improved, electrolytic aluminum prices are relatively firm, or the price of scrap aluminum has been boosted, after the holiday scrap aluminum or stable medium and small rise market, holders are favorable to shipments, beware of price decline
.

5.
Market outlook

This month, Lun aluminum fluctuated and fell; Sino-US trade conflict related concerns linger, macro short once again made Lun aluminum trend weak, intraday new low, from the trend point of view, lack of favorable boost, and macro short, short-term aluminum price shock trend is difficult to change, it is expected that the overall fluctuation range of London aluminum in June is 1720-1880 US dollar trend
。 Contrary to the trend of Lun aluminum, the trend of the Shanghai aluminum index this month is slightly stronger, Sino-US trade tensions are still bearish aluminum prices, but the fundamentals are good, so that the overall Shanghai aluminum around the range of 1.
4-14,400 fluctuations, from the trend point of view, the domestic destocking trend is good, the Shanghai aluminum shock strong trend unchanged, but still pay attention to macro bearish factors, and weak downstream demand, aluminum prices may be difficult to have a big rise in the market, it is expected that the Shanghai aluminum shock range market in June will remain unchanged, temporarily pay attention to the 14,000 mark support
.