SunSirs: Inventory Continues to Decline in July, Chinese Aluminum Prices Exceeded the Line of 15,000 for the Second Time

Chinese aluminum prices exceeded the line of 15,000 for the second time in July

According to SunSirs data, the average domestic aluminum ingot market price was RMB 15,010/ton on July 31, which was an increase of 4.41% from the average market price at the beginning of the month (July 1) of RMB 14,376.67/ton; March 1) 14,553.33 yuan/ton, an increase of 3.14%; compared with the average market price during the year (March 24) 11230 yuan/ton, an increase of 33.58%.

In July, the price of aluminum ingots jumped to the peak of the year (July 13) 15,343.33 yuan/ton, and then the price continued to fall. On July 17, the price of aluminum fell to 14,380 yuan/ton, then stopped falling and stabilized, rising slightly, at the end of the month. The price of aluminum ingots once again returned to the first line of 15,000 yuan/ton within the month.

List of aluminum industry data in the first half of the year

Domestic production:

According to data from the National Bureau of Statistics, from January to June 2020, China’s primary aluminum output was 17.889 million tons, a year-on-year increase of 1.7%; aluminum production was 26.458 million tons, a year-on-year increase of 7.8%; alumina production was 35.2 million tons, a year-on-year decrease of 5.1% , The decline narrowed by 2.1 percentage points compared with the first quarter.

Among them, the national electrolytic aluminum production in June was 3.004 million tons, an increase of 2.42% year-on-year.

For export:

From January to June 2020, the export of unwrought aluminum and aluminum products was 2.366 million tons, a year-on-year decrease of 20.6%; from January to June, the export of aluminum products was 2.244 million tons, a year-on-year decrease of 15.1%, and the decline increased by 2.9 percentage points from the first quarter; , China exported 354,000 tons of unwrought aluminum and aluminum products in June, a year-on-year decrease of 30%.

Import side:

The total imports of primary aluminum from January to June of 2020 are 162,300 tons, a year-on-year increase of 390%; the imports of unwrought aluminum from January to June are 629,000 tons, a year-on-year increase of 591.1%; the cumulative imports of alumina from January to June are 1.939 million tons, an increase of 501.3% year-on-year; January-June imported bauxite (physical volume) 58.31 million tons, an increase of 8.6% year-on-year; January-June imported 389,000 tons of aluminum scrap, a year-on-year decrease of 53.9%.

Among them, the import volume of primary aluminum in June was 123,500 tons, of which tariff number 76011010 was 0.0086 million tons, and tariff number 76011090 was 123,400 tons. In June 2020, primary aluminum imports increased by 577% month-on-month, and increased by 4,060% year-on-year in June last year. Imported 422,600 tons of alumina in June.
Data show that in the first half of 2020, the domestic aluminum industry's output increased steadily, imports of bauxite and smelted products increased year-on-year, and the decline in downstream aluminum exports expanded.

The social inventory of aluminum ingots continues to decline VS production capacity is expected to increase

On July 23, domestic spot inventories of aluminum ingots were 70.2 tons, 6,000 tons less than last week. The social inventory of aluminum ingots fluctuated below 690,000 tons at the end of the month.

In the second half of the year, the new production capacity of electrolytic aluminum in Yunnan, Inner Mongolia and other places is expected to be relatively large. According to statistics, the total new equipment production capacity in these regions will be about 3 million tons in 2020, and the market supply pressure will increase; on the one hand, due to the delayed launch in the first half of the year As a result, some production capacity will be gradually put into production in the second half of the year. On the other hand, the current price of aluminum ingots has rebounded, and the profit per ton of aluminum supports manufacturers' willingness to start production.

Outlook 

In the traditional off-season of the aluminum market from June to August, the price of electrolytic aluminum was strong. At present, a large part of the supply of electrolytic aluminum appeared in the form of "aluminum-aluminum". In addition, the domestic downstream real estate industry, automobile consumption, cable and other consumption scenarios are expected to be good, and the spot The destocking of aluminum ingots is obvious. It is expected that it will continue to operate strongly in the near future. The price of aluminum ingots in August will most likely be 14,500-15,500 yuan/ton.

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