The spot aluminum price pulls back 13.55% from high
According to data from SunSirs, on January 20, 2021, the average price of domestic standard aluminum ingots in the East China market was 14,776.67 yuan/ton, a decrease of 6.04% from the beginning of the month (January 1) 15,726.67 yuan/ton; compared with the peak average market price in 2020 ( December 2) 17093.33 yuan/ton, a decrease of 13.55%.
The current price is close to the range of aluminum ingot prices in mid-to-late October 2020.
Fundamentals of aluminum ingots
1. Import and export data
According to data from the General Administration of Customs, the annual export volume of unforged aluminum and aluminum products in 2020 was 485,7434.8 tons, down 15.2% from 2019. Among them, China's December export volume of unforged aluminum and aluminum products was 456130.4 tons.
2. List of production capacity, output and operating rate in December
According to statistics, the operating rate of electrolytic aluminum has been slowly rising since May 2020. The production capacity in December was around 39 million tons, and the operating rate was around 90%, which was the highest in the past 10 years. The domestic electrolytic aluminum output in December was around 3.3 million tons, an increase of 8% year-on-year.
3. The social inventory of aluminum ingots rebounded slightly
On January 14, the domestic spot social stock of aluminum ingots was 68.4 tons, an increase of 20,000 tons over last week. The social stock of 6063 aluminum rods in Foshan, Wuxi, Nanchang, Changzhou, and Huzhou was 82,700 tons, a decrease of 3,000 tons from last week.
4. One of the domestic terminals: the trend of automobile production and sales data in 2020 is positive
According to data from China Association of Automobile Manufacturers, in 2020, the annual automobile production and sales will be 25.225 million and 25.311 million respectively, down 2% and 1.9% year-on-year, respectively, and the rate of decline narrowed by 5.5 and 6.3 percentage points respectively from the previous year. The production and sales of new energy vehicles were 1.366 million and 1.367 million, representing a year-on-year increase of 7.5% and 10.9% respectively. The growth rate has changed from negative to positive compared with the previous year. Among them, China sold 2.831 million vehicles in December, a year-on-year increase of 6.4%, and sales of new energy vehicles in December was 248,000 vehicles, a year-on-year increase of 49.5%. . According to data from the Passenger Association, the annual wholesale sales of domestically-made narrow passenger vehicles reached 19,763,300 in 2020, a year-on-year decrease of 6.3%. The top three are FAW-Volkswagen, SAIC-Volkswagen and SAIC-GM. Sales in the market exceeded expectations, reflecting the industry's steady recovery after two consecutive years of decline.
Influencing factors of aluminum ingot market outlook
1. Aluminum ingot consumption is expected to weaken in the early Spring Festival. Affected by the downstream shutdown during the Spring Festival holiday, aluminum ingot consumption may cool down slightly. At present, the domestic aluminum ingot social inventory has been slightly accumulated. Although the rate has slowed down, it may be short-term Will last.
2. There is not much new domestic production capacity, the profit of electrolytic aluminum in the early stage is relatively high, the prices of internal and external disks are inverted, and the demand for imported aluminum ingots is strong. Although aluminum prices have fallen, the short-term operating rate is unlikely to change significantly, and domestic supply is relatively stable.
3. In terms of investment, Shanghai Aluminum's total position has stopped falling and stabilized, and the willingness of longs to take profit has weakened, and the long-short game is stalemate.
Market outlook conclusion
On the raw material side, affected by the rise in thermal coal prices, the cost side is somewhat more favorable for aluminum ingot prices. Based on the current sharp decline in profits, the cost side impact factor has been enlarged compared with the previous period; however, as the Spring Festival approaches, the impact of production and power restrictions has expanded, and downstream construction has started The gradual decline and the weakening of downstream consumption at the end of the year are negative for aluminum prices. It is expected that the recent weakness of aluminum prices has not changed, but the chance of consolidation has increased.
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