Overall increase in aluminum prices in April
Aluminum prices rose overall in April and slightly declined this week. According to the Commodity Market Analysis System of Business Society, the average price of aluminum ingots in the East China market on April 20, 2024 was 20360 yuan/ton, an increase of 4.14% compared to the average market price of 19550 yuan/ton at the beginning of the month; Compared to last Friday (4.12), the average price of aluminum ingots in the East China market was 20570 yuan/ton, a decrease of 1.02%.
This week, aluminum prices have fluctuated and fallen mainly due to the impact of news sentiment in the early stage (the UK and the US have imposed sanctions on Russian metals, including aluminum, which accounts for a relatively high proportion of LME deliverable inventory, especially copper and aluminum, and there may be some panic in the market). As a result, aluminum prices have strengthened. After the rise of aluminum prices, the market has gradually begun to digest the news, coupled with increased expectations of delayed macro interest rate cuts this week, dragging down the market’s continued upward trend.
Fundamental Overview:
1. Inventory changes
As of April 18th, the social inventory of domestic electrolytic aluminum ingots was 844000 tons, a decrease of 10000 tons compared to the same period last week.
As of April 18th, LME aluminum inventory decreased by 4600 tons compared to the previous trading day and 15400 tons compared to the same period last week.
2. Production data of the industrial chain in the first quarter
According to data from the National Bureau of Statistics, the cumulative production of electrolytic aluminum in China from January to March 2024 was 10.694 million tons, a year-on-year increase of 6.8%. Among them, in March 2024, China’s electrolytic aluminum production reached 3.585 million tons, a year-on-year increase of 7.4%.
Raw material end: From January to March 2024, China’s cumulative production of alumina reached 20.166 million tons, a year-on-year increase of 2.8%. Among them, in March 2024, China’s alumina production reached 6.776 million tons, a year-on-year increase of 0.5%.
Downstream end: From January to March 2024, China’s cumulative aluminum production reached 15.685 million tons, a year-on-year increase of 13.5%. Among them, the aluminum production in March 2024 was 6.03 million tons, a year-on-year increase of 8.4%.
3. Import and export data of the industrial chain in the first quarter
The latest data from the General Administration of Customs shows that from January to March 2024, China exported 1.48 million tons of un forged aluminum and aluminum materials, a year-on-year increase of 7.4%; Among them, in March, China exported 510000 tons of un forged and rolled aluminum and aluminum materials, a year-on-year increase of 3.1%.
In terms of imports, from January to March 2024, China’s cumulative imports of unwrought aluminum and aluminum materials reached 1.1 million tons, an increase of 92.3% year-on-year; In March, the import volume of unwrought aluminum and aluminum materials was 380000 tons, an increase of 89.8% year-on-year.
4. Terminal demand data for the first quarter
According to statistics from the China Association of Automobile Manufacturers, China’s automobile production and sales reached 6.606 million and 6.72 million units respectively from January to March 2024, with year-on-year growth of 6.4% and 10.6%. Among them, the production and sales of automobiles in March reached 2.687 million and 2.694 million respectively, with a month on month increase of 78.4% and 70.2%, and a year-on-year increase of 4% and 9.9%, respectively.
In terms of domestic infrastructure construction investment, from January to March 2023, domestic infrastructure investment increased by 8.75% year-on-year.
In terms of domestic real estate: According to statistics from the National Bureau of Statistics, from January to March 2024, the construction area of Chinese real estate development enterprises was 678.51 million square meters, a year-on-year decrease of 11.1%. Among them, the residential construction area was 47.45.8 million square meters, a decrease of 11.7%. The newly constructed area of housing is 172.83 million square meters, a decrease of 27.8%. Among them, the newly started residential construction area was 125.34 million square meters, a decrease of 28.7%. The completed area of houses is 152.59 million square meters, a decrease of 20.7%. Among them, the completed residential area was 111.48 million square meters, a decrease of 21.9%.
Recent supply and demand variables: Yunnan’s resumption of production
On the supply side: Following the release of 800000 kilowatts of electricity in Yunnan Province in March for the resumption of electrolytic aluminum production, due to the improvement of water levels in mainstream hydropower stations in Yunnan region, an additional 300000 kilowatts of electricity can be used for the resumption of electrolytic aluminum production. It is expected to increase production capacity by 200000 tons and resume production in April; Adding up the previous production capacity of 500000 tons, the Yunnan direction’s production capacity can reach 700000 tons.
Future Market Forecast
The aluminum price is likely to enter a long short stalemate stage, with an increased probability of sideways fluctuations. The long short factors are as follows:
Multiple reasons:
1. Inventory: As of April 18th, the inventory of electrolytic aluminum in the mainstream domestic market was 844000 tons, which is 910000 tons compared to the inventory of electrolytic aluminum in the mainstream domestic market on March 28th, with 66000 tons removed from stock; In the near future, the social inventory of aluminum ingots may enter a state of destocking, which will provide certain support for aluminum prices.
2. The macro trend remains unchanged, and under the expectation of the Federal Reserve’s interest rate cut, the expectation of overseas monetary easing is strengthened. The non-ferrous sector has certain financial attributes, which provides positive support for aluminum prices.
Air Force Reason:
1. Yunnan’s supply will continue to rise in the future. Recently, aluminum companies in Yunnan have resumed production ahead of schedule and have basically been implemented. The external power transmission in Yunnan Province has decreased, and the power supply in the province is abundant. The process of resuming electrolytic aluminum production is underway. There is an expectation of an increase in domestic supply.
2. The import window was temporarily closed in the early stage, and with the rise of domestic aluminum prices, the domestic spot discount situation has improved. The data shows that the year-on-year surge in overseas raw aluminum imports from January to February has had a certain impact on domestic spot prices. However, the United States and the United Kingdom have announced new trading restrictions on Russian aluminum, copper, and nickel, as sanctions will not prohibit non US individuals and entities from purchasing Russian physical copper, nickel, or aluminum. It remains to be seen whether Russian aluminum will gradually enter the domestic market.
| http://www.thiourea.net |