Aluminum market trends in April
According to SunSirs data, the average domestic aluminum ingot market price was 1,813.33 yuan / ton as of April 30, which was 11.526.67 yuan / ton from the beginning of the month (April 1), an increase of 11.16%.
In the first quarter, the surplus hit the plunge
As of March 30, the average domestic aluminum ingot market price was 12,793.33 yuan / ton, which was 20.98% lower than the average market price of 14,553.33 yuan / ton at the beginning of the year (January 1).
After the Spring Festival, the aluminum price plummeted, once fell below the industry average cost price, the current domestic electrolytic aluminum production cost weighted price is about 11,800-12,000 yuan / ton. (Roughly weighted valuation, consumption of 1.93 tons of alumina per ton of aluminum, 0.48 tons of anode carbon blocks, 0.02 tons of aluminum fluoride, 0.01 tons of cryolite, and 13,500 degrees of electricity)
Reasons for the fundamental collapse
1. Oversupply of the global primary aluminum market from January to February
According to the monthly report data released by the World Metal Statistics Bureau (WBMS) on Wednesday (April 22), the global primary aluminum market has an oversupply of 684,000 tons in January-February 2020, and for the entire year 2019, it will be an oversupply of 492,000 tons.
According to January-February 2020, global primary aluminum production increased by 8% compared with the same period of the previous year. The global primary aluminum demand in January-February 2020 was 10.4 million tons, an increase of 411,000 tons from the same period in 2019.
2. The Chinese supply and demand imbalance of electrolytic aluminum in the first quarter
From January to March 2020, China's total output of electrolytic aluminum was 8.976 million tons, an increase of 4% year-on-year; domestic consumption of electrolytic aluminum in the same period was 7.505 million tons, a decrease of 9% year-on-year.
In March, the national output of electrolytic aluminum was 3.036 million tons, an increase of 1.9% year-on-year; of which the metallurgical grade alumina output was 5.434 million tons, and the metallurgical grade daily output was 175,300 tons, a year-on-year decline of 1.75%.
3. The export volume of electrolytic aluminum dropped sharply in the first quarter
From January to March 2020, the export of unwrought aluminum and aluminum materials was 1.187 million tons, a year-on-year decrease of 17.5%. However, the export of raw alumina surged. It is reported that the cumulative alumina export in the first quarter was 690,000 tons, a year-on-year increase of 433%.
Production reduction, consumption rebound, aluminum prices out of the trough in April
In late March, domestic concentrated production reduction and maintenance companies began to increase, and some manufacturers avoided large losses by reducing production and shutting down for maintenance. In April, the price of electrolytic aluminum began to bottom out. On the one hand, the domestic willingness to increase new production capacity was reduced, and the time was slightly delayed; On the other hand, the foreign epidemic situation has a greater impact, and some foreign aluminum enterprises are expected to strengthen production cuts.
The low price of aluminum ingots also ushered in a small peak in market consumption, and the stock of aluminum ingots and aluminum rods fell. As of April 23, the social inventory of aluminum ingots decreased by 82,000 tons to 1.354 million tons from last Monday; The social stock of 6063 aluminum rods in Foshan, Wuxi, Nanchang, Changzhou and Huzhou is 147,500 tons, a decrease of 22,500 tons from last week.
Estimated market outlook
From the perspective of historical price trends, the current price is not high. Although the price of the raw material end of the industrial chain has been synchronously lowered, the cost support is still strong. The domestic demand in the second quarter is expected to warm up. In the 12,500-13,500 interval, the oscillating operation is dominated.
Factors of recent aluminum price:
1. Policy news: Expectation of Yunnan stockpiling & real estate completion and the wire and cable industry are supported by policies.
2. Domestic downstream: Consumption of domestic automobile and home appliance industries.
3. Aluminium exports: Watch the development of foreign epidemic situation.
Related listed companies: Zhongjin Lingnan (000060), Chihong Zinc Germanium (600497).
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