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SunSirs: After Rising 19.78% during the Year, China's Aluminum Prices may Enter the Fluctuation Range in the Near Future

June 15 2021 09:01:55     SunSirs (Linda)

After the high correction, it stopped falling and stabilized

On June 11, the average price of domestic aluminum ingots in the East China market was 18,836.67 yuan/ton, which was lower than the recent low of 18,270 yuan/ton on June 4, an increase of 3.10%; compared with the cycle high on May 10, the average market price was 20043.33 yuan /Ton, a decrease of 6.02%.

Based on the average market price of aluminum ingots at the beginning of the year (January 1, 2021) at RMB 15,726.67 per ton, the benchmark price has increased by 19.78%.

It is reported that in late May, affected by the recent news about key companies in the ferrous and non-ferrous industries by the regulatory authorities, (domestic, affected by the early surge in bulk commodities, the current policy is mainly to ensure supply and price stabilization, and to curb bulk commodity prices in an all-round way. Unreasonable rise. The voice of the policy department triggered the market's expectations of later policy adjustments, and the commodity market sentiment showed signs of cooling.) The domestic spot aluminum ingot price has begun to decline, and now it has stabilized, and even slightly increased last week.

Industry chain import and export data

Raw material end:

Bauxite imports fell in April

According to customs data, China imported 8.739 million tons of bauxite in April 2021, a year-on-year decrease of 12.16% and a month-on-month decrease of 13.45%. Among them, Guinea is the largest supplier. In April, China imported 4,750,200 tons of bauxite from Guinea, a year-on-year decrease of 1.85% and a month-on-month decrease of 17.14%. China’s imports from Australia in April amounted to 2,945,200 tons, a year-on-year increase of 1.95% and a month-on-month decrease of 4.83%. Indonesia's April import volume was 1.044 million tons, a year-on-year decrease of 48.03% and a month-on-month decrease of 13.68%.

Downstream products:

In April 2021, the import volume of unwrought aluminum alloy was 281,139 tons, an increase of 36.10% month-on-month and a year-on-year increase of 165.07%; imports of unforged aluminum and aluminum materials from January to April totaled 942,800 tons, an increase of 130.9% year-on-year.

China's total exports of unwrought aluminum and aluminum products in April were 437,200 tons, a decrease of 14.48% month-on-month and 8.82% year-on-year. From January to April this year, China’s cumulative exports of unwrought aluminum and aluminum products were 1.7226.9 million tons, an increase of 5.8% year-on-year.

In the first 4 months, the price of the domestic aluminum industry chain was high, there was an arbitrage of the internal and external price differences, and the volume of imports increased significantly year-on-year.

Domestic aluminum industry chain production data 

According to the National Bureau of Statistics of China, the output of electrolytic aluminum in April was 3.35 million tons, a year-on-year increase of 12.4% and a month-on-month increase of 3.9%. The output of electrolytic aluminum from January to April was 13.02 million tons, a year-on-year increase of 9.6%.

From January to April 2021, the cumulative output of aluminum is 18.942 million tons, a cumulative increase of 19.60%.

Among them, in terms of the start of aluminum enterprises in April, the operating rate of aluminum profile enterprises was 57.72%, an increase of 6.80 percentage points from the previous month, and a decrease of 1.75 percentage points from the same period in 2020; the operating rate of aluminum plate, strip and foil enterprises was 78.23%, an increase of 5.81 percentage points from the previous month. In the same period of 2020, an increase of 2.63 percentage points; the operating rate of secondary aluminum alloy ingot enterprises was 56.00%, an increase of 5.66 percentage points from the previous month and an increase of 14.29 percentage points from the same period last year. The operating rate of aluminum rod and wire enterprises was 51.6%, an increase of 8 percentage points from the previous month and a decrease of 8 percentage points year-on-year.

Affected by price factors in the first 4 months, the output of the aluminum ingot industry chain showed an overall upward trend.

Terminal consumption data list

Real estate data

In April, the national real estate sales area was 143 million square meters, +19.2% year-on-year; the sales amount was 1.5231 billion yuan, +32.5% year-on-year. National real estate sales area of ​​503 million square meters from January to April, +48.1% year-on-year; sales amount was 5,360.9 billion yuan, year-on-year +68.2%; compared with January-April 2019, cumulative sales area and sales amount increased year-on-year respectively 19.5% and 37%.

Automotive Industry Data

In April 2021, automobile production and sales completed 2.234 million and 2.252 million respectively. Compared with the same period in 2019, production and sales increased by 8.7% and 13.5% year-on-year. The automobile market continued to show a steady and positive development trend.

In April, the production and sales of new energy vehicles were 216,000 and 206,000, respectively, an increase of 1.6 times and 1.8 times respectively over the same period last year. From January to April, the production and sales of new energy vehicles were 750,000 and 732,000 respectively, a year-on-year increase of 2.6 times and 2.5 times.

The domestic terminal consumption situation was relatively good in the first 4 months.

Outlook 

Supply side:

As the Chinese aluminum industry accelerates the implementation of the carbon peak target, the local government's energy consumption "dual control" policy has promoted the domestic aluminum ingot price to a certain extent. On the one hand, the policy of dual control of energy consumption has become stricter, which will affect the progress of new production capacity to a certain extent; on the other hand, the price has risen and the operating rate of production capacity has risen.

In the near future, in terms of domestic operating capacity, the companies that are expected to resume production are: Gansu Zhongrui and Shanxian Hengkang. On the whole, affected by the power curtailment in Yunnan, it is expected that the electrolytic aluminum production capacity will not increase much in the near future.

Demand side:

Investment in real estate development during the year generally showed a trend of high and low, and the overall annual data is expected to rise slightly year-on-year; on the automotive consumer side, it is expected that with the alleviation of chip shortages, there will be a heavy increase in the latter half of the year. Overall, the demand side is relatively good.

The current price of 1,8000-19,000 yuan/ton is a steady-state shock range formed by market games. It is estimated that the price of aluminum ingots will basically be around 18,500 yuan/ton in the near future.

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