The growth rate of electrolytic aluminum production capacity slows down, and there are more supply disturbances

According to SMM statistics, in July，aluminium profile manufacturers in china as about 3.5 million tons, a year-on-year increase of 6.74%; the average daily output increased by 862 tons month-on-month to 112,900 tons. From January to July, the cumulative domestic production of electrolytic aluminum reached 23.059 million tons, a cumulative increase of 1.4% year-on-year. On the whole, in July, Gansu, Yunnan and other regions resumed production of electrolytic aluminum and continued to release new production capacity, and the total operating capacity of domestic electrolytic aluminum increased steadily. However, due to factors such as high costs, the growth rate of production capacity in Guangxi has slowed down.

In August, affected by factors such as high temperature weather, the power supply in Sichuan and Chongqing continued to be limited, and some local electrolytic aluminum plants experienced different levels of production reductions and shutdowns. Among them, the production capacity of 1.07 million tons of electrolytic aluminum in Sichuan is in a state of shutdown, and the production capacity of about 30,000 tons of electrolytic aluminum in Chongqing is limited. Although the power supply in the Sichuan-Chongqing region was gradually restored at the end of August, the production process of electrolytic aluminum required a long time to resume production.

At present, the increase of electrolytic aluminum operation capacity is mainly concentrated in Gansu, Guangxi, and Yunnan. However, due to the fact that the water supply of Yunnan's main power station was nearly 50% dry in August, and the power supply was relatively tight, some electrolytic aluminum in Yunnan Province may start to reduce load production by 20% to 30% in September.

Energy price fluctuations affect overseas production Domestic primary aluminum imports and exports are relatively balanced

In August, hot and dry weather occurred frequently around the world, and energy prices in Europe rose repeatedly, causing electrolytic aluminum companies in Europe to reduce production due to cost pressures. Up to now, European aluminum smelters have reduced production by nearly 1.4 million tons.

According to statistics, the global electrolytic aluminum production capacity is about 79.28 million tons, of which the total built capacity in Europe is about 10.348 million tons, accounting for about 13% of the global total. If energy prices remain at a high level, it is expected that overseas electrolytic aluminum companies will be difficult to resume production in the short term.

According to data from the General Administration of Customs, in July, my country's primary aluminum imports were about 51,037.4 tons, a month-on-month increase of 79.1% and a year-on-year decrease of 72%. From January to July, the total domestic import of primary aluminum was 248,200 tons, down 73.16% year-on-year. In July, my country's primary aluminum export volume was about 7,589 tons, a month-on-month increase of 14.6% and a year-on-year increase of 16 times. From January to July, the total export volume of domestic primary aluminum was 184,300 tons, a year-on-year increase of 4,243.1%.

The domestic supply is relatively stable, but in the case of frequent reductions in electrolytic aluminum production in Europe and the United States, the import of domestic aluminum ingots has dropped significantly this year, and there is still a gap in the market supply. The market generally predicts that from August to September, domestic aluminum ingots may maintain a slight net import trend, mainly due to the inflow of Rusal.

The profit of electrolytic aluminum industry increased slightly

In August, the average cost of domestic electrolytic aluminum enterprises remained at 17,800 yuan to 18,000 yuan per ton. Among them, the prices of alumina and anode materials decreased slightly, the price of electricity remained stable, and the prices of raw materials at the cost side decreased compared with July. In August, due to insufficient power supply in some areas, the supply side of electrolytic aluminum frequently reduced production, and aluminum prices rose. The profit of electrolytic aluminum increased slightly compared with July, but some high-cost areas, such as Henan, Chongqing, Guangxi and other places, were still in a state of loss.   

Alumina prices fell steadily

According to SMM statistics, in July, China's metallurgical grade alumina output was 6.94 million tons, with an average daily output of 223,900 tons. The total output increased by 2.97% month-on-month and 14.11% year-on-year. In July, the operating capacity of alumina was 81.713 million tons, and the national operating rate was 87%. In August, the market price of domestic alumina declined, with the monthly average price dropping by about RMB 20/ton. Affected by the shortage of power supply in the southwest region, some alumina plants have appropriately curbed and reduced production, but they have not yet recovered. With the gradual restoration of power supply at the end of August, alumina enterprises whose production was affected by the limited power supply in the early stage may gradually resume production.

In terms of imports, customs data shows that in July, my country exported 36,700 tons of alumina, down 80.61% month-on-month and 28.64% year-on-year. In July, alumina imports were 158,000 tons, a month-on-month increase of 14.09% and a year-on-year decrease of 70.02%. In July, my country's alumina net import was 121,300 tons.

Bauxite prices are easy to rise and hard to fall

In terms of imported minerals, customs data shows that in July, my country imported a total of 10.591 million tons of bauxite, a month-on-month increase of 12.5% and a year-on-year increase of 14.4%. Among them, 5.9367 million tons were imported from Guinea, an increase of 3.3% month-on-month and 36.1% year-on-year; 3.1498 million tons were imported from Australia, a month-on-month increase of 29.2% and a year-on-year decrease of 3.2%; 1.4547 million tons were imported from Indonesia, a month-on-month increase of 38.8%, a year-on-year decrease 11.2%. From January to July, my country imported a total of 75.81 million tons of bauxite, a year-on-year increase of 17.7%. At present, Indonesia's mining ban policy has not yet been finalized, but some alumina refineries have begun to reserve ore for subsequent demand.

On the supply side of domestic mines, in July, my country's bauxite output was 5.84 million tons, a month-on-month increase of 8.4%. From January to July, the cumulative output of bauxite was 38.06 million tons, a year-on-year decrease of 32.4%. The tight supply of domestically produced mines and the high degree of dependence on imports have become a normalized problem in recent years. It is expected that the supply of bauxite will remain in short supply, and the price of ore is easy to rise and difficult to fall.

Insufficient orders at the primary processing end

According to Baichuan data, the price of aluminum processing products fluctuated in August. Among them, the average monthly price of 1060 aluminum plate processing fee is 3555 yuan/ton, down 109 yuan/ton from July; the monthly average price of 6063 aluminum bar processing fee is 357 yuan/ton, down 136 yuan/ton from the average price in July; 1060 The monthly average price of aluminum plate is about 20,608 yuan/ton, an increase of about 434 yuan/ton from the average price in July; the monthly average price of 6063 aluminum alloy round cast rods is 19,037 yuan/ton, an increase of 396 yuan/ton from the average price in July; ADC- The monthly average price of 12 aluminum alloy ingots is about 18,602 yuan/ton, an increase of 544.05 yuan/ton from the average price in July.

In August, as a traditional off-season for consumption, affected by factors such as the spread of the domestic epidemic and high temperature power cuts, the overall order performance of downstream processing enterprises was not good, and the operating rate of enterprises remained low. Although the use of aluminum in the terminal automobile and photovoltaic panels is improving, the overall demand is relatively cold. With the easing of high temperature power cuts and the advent of the traditional peak consumption season, it is expected that market consumption in September may improve month-on-month.  

The performance of the real estate sector is weak, and the aluminum used in new energy continues to improve

From the perspective of real estate, the market performance is relatively weak. According to statistics, from January to July, the national real estate development investment was 7.95 trillion yuan, a year-on-year decrease of 6.4%; the housing construction area of real estate development enterprises was 8.592 billion square meters, a year-on-year decrease of 3.7%. The sales area of commercial housing was 780 million square meters, a year-on-year decrease of 23.1%. Among them, the sales area of residential buildings decreased by 27.1%; the sales volume of commercial buildings was 7.58 trillion yuan, a decrease of 28.8%, of which the sales volume of residential buildings decreased by 31.4%.

The automotive sector is relatively stable as a whole, and aluminum for new energy vehicles continues to improve. According to data from the China Automobile Association, in July, my country's automobile production and sales were 1.863 million and 1.864 million, down 4.1% and 7.5% month-on-month and 15.5% and 11.9% year-on-year. From January to July, the cumulative production and sales of automobiles in my country were 14.44 million and 14.756 million respectively, an increase of 17.2% and 19.3% year-on-year, and a decrease of 7% and 6.3% from January to June respectively. In terms of new energy vehicles, in July, the domestic production and sales volume was 284,000 and 271,000 respectively, an increase of 1.7 times and 1.6 times year-on-year respectively.

The monthly data of photovoltaic installed capacity and export volume are outstanding, and the market demand is relatively strong. In July, the newly installed photovoltaic capacity in China was 6.85GW, a year-on-year increase of 39%; from January to July, the cumulative new photovoltaic installed capacity was 37.73GW, a year-on-year increase of 110%. The export volume of solar cells was 376 million, a year-on-year increase of 95.8%; the export value was 31.573 billion yuan, a year-on-year increase of 128.4%.

The performance of the home appliance sector was flat. The export data of air conditioners and refrigerators continued to decline, but the export volume of washing machines increased. In July, the total sales volume of air conditioners in my country was 14.67 million units, a year-on-year increase of 1.89%; the export volume was 4.69 million units, a year-on-year decrease of 21.7%. In July, my country's domestic sales of refrigerators and freezers reached 4.663 million units, a year-on-year increase of 15.2%; the export volume of washing machines reached 1.86 million units, a year-on-year increase of 16.2%.

On the whole, traditional consumption sectors such as real estate are slightly weak due to factors such as the epidemic and weak macro economy, but aluminum for new energy vehicles and photovoltaic installations continues to improve. In terms of new infrastructure, 5G infrastructure, ultra-high voltage, intercity high-speed railway and rail transit, and new energy vehicle charging piles are important areas of aluminum consumption. Their large-scale investment and construction may drive the recovery of aluminum consumption, which has a significant impact on the current weak downstream consumption. must be good.

Domestic social inventory accumulation slows down, LME inventory remains low

In terms of inventory, as of August 31, according to SMM statistics, the domestic social inventory of electrolytic aluminum was 682,000 tons, a decrease of 71,000 tons compared with the same period last year, and a total of 12,000 tons of monthly inventory at the end of July. In August, the overall inventory of electrolytic aluminum remained stable. Although the monthly consumption performance was weak, there were many supply disruptions due to the tight power supply. Considering that there are still uncertainties in the supply, and with the restoration of power supply and the rapid resumption of production by processing enterprises, it is expected that the accumulation of stocks will slow down in September.

As of August 31, the LME inventory was 277,100 tons, a 4.8% decrease from the inventory at the end of July. At present, energy prices in Europe are still fluctuating at a high level, and overseas supplies are generally tight. Considering that the overseas energy crisis and the geopolitical situation have not eased, LME inventories are expected to remain low.