Aluminum market trend in April
According to the data of business agency, as of April 30, the average market price of domestic aluminum ingots was 12813.33 yuan / ton, up 11.16% from 11526.67 yuan / ton at the beginning of the month (April 1).
The first quarter surplus hit a slump
According to the data of business agency, as of March 30, the average market price of domestic aluminum ingots was 12793.33 yuan / ton, a decrease of 20.98% compared with 14553.33 yuan / ton at the beginning of the year (January 1), and 11230 yuan / ton compared with the average market price of the year (March 23), a decrease of 22.84%.
After the year, aluminum price plummeted, once falling below the industry average cost price. At present, the weighted cost of domestic electrolytic aluminum production is about 11800-12000 yuan / ton. (Rough weighted estimation, 1.93 tons of alumina, 0.48 tons of anode carbon block, 0.02 tons of aluminum fluoride, 0.01 tons of cryolite and 13500 degrees of power consumption per ton of aluminum)
Reasons for the collapse of Fundamentals:
1. Oversupply of global raw aluminum market from January to February
According to the monthly report data released by the world Bureau of Metal Statistics (WBMs) on Wednesday (April 22), there is a supply surplus of 684000 tons in the global primary aluminum market from January to February 2020, and 492000 tons in 2019.
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According to the data from January to February 2020, the global primary aluminum production increased by 8% over the same period of last year. Although the global demand for raw aluminum from January to February 2020 is 10.4 million tons, an increase of 411000 tons compared with the same period in 2019.
2. Imbalance of domestic electrolytic aluminum supply and demand in the first quarter
From January to March 2020, China’s total production of electrolytic aluminum is 8.976 million tons, an increase of 4% year on year; the consumption of domestic electrolytic aluminum in the same period is 7.55 million tons, a decrease of 9% year on year.
In March, the output of electrolytic aluminum in China was 3.036 million tons, an increase of 1.9% year on year; among them, the output of metallurgical grade alumina was 5.434 million tons, and the daily average output of metallurgical grade alumina was 175300 tons, a decrease of 1.75% year on year.
3. Export volume of electrolytic aluminum decreased sharply in the first quarter
From January to March 2020, the export of unwrought aluminum and aluminum products reached 1.187 million tons, a year-on-year decrease of 17.5%. However, the export of raw alumina increased sharply. It is reported that the total export of alumina in the first quarter was 690000 tons, an increase of 433% year on year.
Production reduction, consumption rebound aluminum price out of the trough in April
In late March, the number of domestic centralized production reduction and maintenance enterprises began to increase, and some manufacturers avoided large losses through production reduction, shutdown and maintenance; in April, the price of electrolytic aluminum began to rebound, on the one hand, some new domestic production capacity was willing to reduce, and the time was slightly delayed; on the other hand, the impact of foreign epidemic was large, and some foreign aluminum enterprises were expected to strengthen production reduction.
The low price of aluminum ingots also ushered in a small peak of market consumption, and the inventory of aluminum ingots and rods fell. As of April 23, the social inventory of aluminum ingots decreased by 82000 tons to 1354000 tons compared with last Monday; the social inventory of 6063 aluminum ingots in Foshan, Wuxi, Nanchang, Changzhou and Huzhou decreased by 22500 tons compared with last week.
Future forecast
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According to the historical price trend, the current price is not high. Although the price of raw materials in the industrial chain moves down synchronously, the cost support is still strong. In the second quarter, the domestic demand is expected to turn warm. In the later period, it is expected that the operation will be mainly stable and strong. It is expected that the operation will fluctuate in the range of 12500-13500 in May.
Recent influencing factors of aluminum price:
1. Policy information
Yunnan collection and storage expectation & real estate completion cycle and wire and cable industry are supported by policies.
2. Domestic downstream
Consumption of domestic automobile and home appliance industry.
3. Aluminum export
Wait and see the development of epidemic situation abroad.
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