China's recent aluminum market status
According to relevant statistics, the production of primary aluminum in the fourth quarter is expected to increase by 500,000 tons compared with the third quarter, an increase of 7%. Based on this calculation, the output of electrolytic aluminum this year will reach 24.135 million tons, a year-on-year increase of 9.5%, the same as last year. .
In the second half of this year, Baoluo, Dongxing, and Jinlian have completed the production of 700,000 tons of production capacity. At present, Shenhuo, Hope, Qiya, Xinfa, Weiqiao, and Jinlian are putting into production in the second phase. Zhongwang expects November Started production. Therefore, at the end of the year, the domestic aluminum market will usher in a period of concentrated production capacity, and the market supply will increase significantly.
With the increase in supply, the social aluminum inventory has shown signs of increase. According to statistics, the domestic aluminum inventory increased by 10,000 tons in early November alone, with the most significant increase in the Gongyi area of Henan. At present, the total inventory of Shanghai, Wuxi, Jiangsu, Hangzhou, Zhejiang, Gongyi, Henan, and Nanhai, Guangdong is 641,000 tons. This level has not changed much since September, which is consistent with the performance of aluminum prices since September.
In addition to the increase in supply, the increase in inventory has a lot to do with the decline in domestic aluminum consumption. The domestic real estate market has gradually entered the off-season, especially after the cooling in the northern region, many construction sites had to enter the winter break, and the demand for aluminum naturally declined.
According to data from the National Bureau of Statistics, as of the end of September, my country's housing construction area has increased by 11.5% year-on-year, and this year's new construction area continues to grow negatively. Therefore, the real estate construction area growth rate in the fourth quarter is not optimistic. In addition, the performance of the transportation industry, the second largest aluminum-consuming industry in China, is not optimistic. As of the end of September, my country's total automobile production was 18.49 million, a cumulative year-on-year increase of 9.3%, a decrease of 6 percentage points from the same period last year.
The outlook for domestic aluminum consumption is not optimistic, but the export situation of electrolytic aluminum and related products is very good. According to data from the General Administration of Customs, as of the end of October, China exported 3.4 million tons of unforged aluminum and aluminum products, an increase of 12.6% year-on-year, of which the average monthly export volume from July to October was 387,000 tons, and the export volume in September reached 401,000 tons. Ton.
The first driving force for the significant increase in exports of aluminum and related products comes from the ever-decreasing price ratio between Shanghai Aluminum and London Aluminum. Since the beginning of this year, the price ratio between Shanghai Aluminum and London Aluminum has shown a trend of decline. The price at the beginning of the year was 8.3, and the current latest price ratio is 6.7. Due to restrictions on export tariffs and other aspects, the domestic and foreign aluminum markets have always been in a situation of "two heavens of ice and fire". According to CRU analysis, my country's aluminum market will have a surplus of 720,000 tons this year, while other aluminum markets except China will be short of 830,000 tons.
The second driving force for the increase in exports is the high CIF quotations of aluminum imports from all over the world. The quotation of imported CIF from Japan in Asia has been maintained at US$400/ton since July, and has risen to US$422.5/ton at the end of October, and even as high as US$870/ton in some European regions.
The third driving force for the increase in exports is my country's export tax rebate policy. Although my country's electrolytic aluminum ingot export tariff is relatively high, the aluminum export tax rebate can make up, especially in the recent market rumours that "the tax rebate will increase."
In addition to export-driven aluminum prices, the shift in the cost line has supported aluminum prices. With the increase in the proportion of domestic self-supplied electricity and the gradual implementation of direct power supply, as well as the decline in the prices of raw materials and auxiliary materials, the overall cost of electrolytic aluminum is slowly falling. However, the price of alumina has risen significantly recently. The current alumina port price is 2,800 yuan/ton, an increase of 400 yuan/ton from the July low of 2,400 yuan/ton, which means that the cost of electrolytic aluminum per ton has increased by 800 yuan.
On the whole, the domestic aluminum market is intertwined with long and short factors, and the current point of time is generally bearish, especially the increase in supply and the weak demand at the end of the year will further intensify. In the future, aluminum prices are more likely to operate below 14,000 yuan/ton.