Abstract: since the end of March, the downward trend of Shanghai Aluminum Index has slowed down obviously, maintaining oscillatory operation.
The fundamentals are empty.
Since the end of March, the downward trend of the Shanghai Aluminum Index has slowed significantly, maintaining oscillatory operation. From a fundamental point of view, the last phase of aluminum inventory is at a high level during the year, coupled with the overseas epidemic has not been controlled, affecting China's aluminum profile exports, overall, aluminum prices will continue to oscillate at a low level.
Improvement of corporate profitability.
This week, the average domestic price of alumina was RMB2210/ ton, down RMB110.8/ ton compared with last week. The price of alumina is RMB2655/ ton in the same period in 2019. This week, the average price of alumina was the second lowest in nearly five years. This week, the average spot price of 5500K thermal coal around the Bohai Sea is RMB546/ ton, down RMB5/ ton from last week. In terms of preparing anode, the average price of anode this week is RMB3087.5/ ton, which is RMB59.5/ ton lower than that of last week.
In terms of production cost, the average production cost of electrolytic aluminum this week is RMB11296.03/ ton, down RMB276.35/ ton compared with last week. The average profit of electrolytic aluminum is RMB343.98/ ton, and the profit level is RMB448.35/ ton higher than last week.
As there is a certain positive correlation between the profit level of electrolytic aluminum and the aluminum price, if the profit level of electrolytic aluminum is improved, it will bring some support to the aluminum price.
Demand hasn't picked up yet.
As of April 3, the aluminum inventory of the previous period was 521830 tons, and the current inventory subtotal level is the third highest in the same period of five years. Among them, futures inventory was 299296 tons, an increase of 7913 tons over last week and a high in the New year. In terms of social inventory, as of April 2, the social inventory of electrolytic aluminum in five places counted by SMM was 1.676 million tons, an increase of 9000 tons over last week. The inventory for the same period last year was 1.641 million tons. The current inventory is the second highest in the same period.
From the perspective of the downstream industry, the data from the Federation of passengers show that the total production of passenger cars in March soared month on month compared with February. Compared with the production and sales in February, the cumulative production in March has reached 902000 vehicles, but the year-on-year decline is still 53.4%, a decline of more than half. From the perspective of macro data, the official manufacturing PMI exceeded expectations in February, reaching 52, located above the rise and fall line, significantly higher than the previous value of 35.7, but it will take time to observe whether the good momentum can be sustained. In the short term, domestic inventories are high and passenger car production has halved compared with the same period last year, indicating that downstream demand has not yet picked up and the boost to aluminum prices is limited.
The export of aluminum profiles in China is restricted.
The epidemic has had a significant impact on the global aluminum industry chain. Eight Japanese automobile companies have announced that they have stopped production, including Toyota, Honda, Nissan and other world-famous car companies. China's aluminum profile export industry has not been spared. According to customs statistics, China's exports of unwrought aluminum and aluminum products totaled 669000 tons from January to February, down 25.3 percent from the same period last year.
To sum up, domestic aluminum inventory is still high, demand has not yet completely warmed up, coupled with the overseas epidemic has not been controlled, affecting China's aluminum profile exports, these factors are negative for aluminum prices. In the short term, the Shanghai Aluminum Index will continue to operate at the low level of 11000-12000 yuan / ton. With the passage of time, China's economic situation is expected to return to normal before foreign countries, and the overseas epidemic situation will also be gradually brought under control. therefore, in the medium term, there is a certain upward momentum in aluminum prices.