May 2022 cable raw materials (aluminum) monthly report

First, the fundamentals

1.
According to the latest data from the National Bureau of Statistics, the output of electrolytic aluminum in April 2022 was 3.
361 million tons, a year-on-year increase of 0.
3%; The cumulative output from January to April was 13.
006 million tons, down 0.
2%
year-on-year.
Aluminum output in April was 5.
200 million tons, down 7.
0% year-on-year; The cumulative output from January to April was 19.
232 million tons, down 0.
6%
year-on-year.

2.
According to data from the National Bureau of Statistics, China's alumina output in April 2022 was 6.
820 million tons, a year-on-year increase of 4.
6%; The cumulative output from January to April was 25.
508 million tons, down 1.
5%
year-on-year.

3.
According to the latest data from the General Administration of Customs, in April 2022, China exported 596,800 tons of unwrought aluminum and aluminum products, a year-on-year increase of 36.
5%; From January to April, the cumulative export was 2.
2252 million tons, a year-on-year increase of 29.
2%.

In terms of value, China's exports of unwrought aluminum and aluminum products in April 2022 amounted to US$2512.
3 million, a year-on-year increase of 0.
8%; From January to April, China's cumulative export value of unwrought aluminum and aluminum products was 8995.
6 million US dollars, a year-on-year increase of 68.
6%.

4.
In April 2022, China's industrial alumina imports were 73,500 tons, a year-on-year decrease of 68.
75%, showing a sharp decline; From January to April 2022, China's cumulative imports of industrial alumina were 676,800 tons, a year-on-year decrease of 31.
72%.

In April, China's alumina was still mainly imported from 23 countries such as Australia, Vietnam and Kazakhstan, and Australia was still the largest source of alumina imports in China, with an import volume of 178,400 tons
.
Vietnam followed with 26,400 tonnes and imported alumina from Kazakhstan with 19,200 tonnes
.
The cumulative import of alumina from the remaining 20 countries including Brazil, Japan and France was 11,100 tons
.

5.
In April 2022, China's alumina exports were 167,700 tons, an increase of 155,000 tons month-on-month, refreshing a new high
since 2018.
From April to May, the amount of domestic alumina exported increased significantly, and it is expected that the high export volume of alumina this year may continue
.

Second, the market review

This month's aluminum price showed a bottoming and recovery trend, during which Shanghai aluminum once fell below the 20,000 mark, the lowest fell back to 19,540 yuan / ton, but later showed a recovery trend, as of the end of the month, the cumulative decline was 0.
45%; The Fed's interest rate hike within the month came as scheduled, coupled with the sluggish downstream demand caused by the domestic epidemic, the accumulation of multiple bearishness led to the continuous correction of aluminum prices, but in the second half of the country introduced a series of policies to stimulate consumption, the fundamentals of the aluminum market gradually recovered, the price showed a slow upward trend, as far as the next month's market conditions are concerned, the fundamentals are low and inventories will continue to support the price, but it is still necessary to pay attention to the Fed's interest rate hike in mid-June, pay attention to the range 20400-22000 fluctuations
.

In terms of the market, East China was still seriously affected by the epidemic in May, due to regional control and other factors, some downstream enterprises reported that shipments and purchases were blocked, order demand was not good, and the repeated pledge incident in Guangdong warehousing at the end of the month made traders cautious in trading, and the overall transaction was weak
.

East China: This month's aluminum price narrow range, at the beginning of the month due to the intensification of overseas panic, domestic due to the epidemic in many places of the enterprise operating rate is insufficient, market confidence is insufficient, East China spot aluminum price once fell below 20,000, the lowest to 19,620 yuan / ton, then the shock rebounded, back to 20,000 yuan / ton fluctuations, as of May 31, East China spot aluminum price between 20,740-20,780 yuan / ton, down 50 yuan / ton from the end of April, down 0.
24%.

South China: At the beginning of the month, it was also affected by macro and other factors, the shock fell, the price of spot aluminum ingots in South China was as low as 20,000 yuan / ton, and then picked up, as of May 31, the price of Foshan aluminum ingots with tickets was between 20970-21070 yuan / ton, down 130 yuan / ton from the end of April, down 0.
62%; The overall transaction volume of the market was significantly better than that of East China, but the repeated pledge event of local warehousing at the end of the month weakened
traders' trading.

3.
Inventory

The decline in LME aluminum inventories widened in May 2022, with LME aluminium stocks at 458875 tonnes as of May 31, down 111225 tonnes or 19.
5% from the end of April; LME aluminum stocks continue to fall, continuing to hit a new low, falling below 500,000, and there is a possibility
of continued decline in the short term.

In May 2022, Shanghai aluminum inventories continued to decline, but the decline slowed down from April, as of May 27, Shanghai aluminum inventories were 285567 tons, down 4,574 tons, or 1.
6%, from the end of April; In addition, it is understood that as of June 2, the inventory of electrolytic aluminum in 8 mainstream consumption areas in the country is about 880,000 tons, which is still showing a downward trend, which is good for aluminum prices
.

Fourth, the waste market

In May, the recycled aluminum market showed obvious stagflation, especially in the middle and late months, as of the end of the month, 6063 old materials in South China were around 16200, and the mainstream of machine aluminum was around 15600, down 200-300 yuan from April; East China due to weak demand, scrap aluminum decline slightly expanded, mostly in 200-400 yuan, the current local market mainstream price spraying old material around 16200, aluminum wire around 18200, cans around 13800, first-class raw aluminum around
15700.

In terms of the market, due to the sharp decline in the price of alloy ingots, aluminum plants pressed the price of scrap aluminum raw materials, and in May, cans, raw aluminum and other scrap aluminum showed a clear state of falling and not rising
.
Henan Changge, Jiangsu Suzhou and other places affected by the epidemic, the receipt of goods is frequently blocked, Shanghai May trading is basically still in a stagnant state, the overall market transaction in May is still not good, aluminum factory procurement has increased, but the increase is not obvious
.

It is understood that after two months of lockdown management in Shanghai, after entering June, scrap aluminum enterprises have basically resumed the state of receipt, but the market circulation of goods is scarce, and affected by transportation, the export of goods is still hindered to a certain extent, freight is high, Pudong, Qingpu and other areas of goods still can not go out, is expected to last for a few days, after the Dragon Boat Festival will recover
.
The weak demand of short-term downstream die-casting enterprises is difficult to improve, the orders of recycled aluminum enterprises are weak, the stagnation of aluminum alloy ingots is obvious, the performance of raw aluminum and cans after the holiday is expected to remain stagnation, and the shock of aluminum alloy materials is expected to be strong
after the holiday.

5.
Market outlook

In the short term, with the lifting of the lockdown in Shanghai in June, the implementation of economic boost measures may pull up the current weak downstream consumption, and aluminum prices are expected to continue to rise
.
However, considering that the actual demand recovery is slow, it is expected that the destocking will continue to slow down, the fermentation of aluminum ingot trade financing, and the increase in spot circulating inventory, it is difficult for aluminum prices to continue to rebound
.
In the medium and long term, the supply pressure is greater, under the epidemic and real estate control policies, demand expectations are pessimistic, and the aluminum price center is expected to move closer to the cost line
.