Since March, under the influence of multiple factors, commodity prices have hit new highs. In the metal market, copper has always been one of the focus of attention, as a representative of the base metal, copper has always led the change in the price of other metals. The recent surge in copper prices, mining interference events frequently led to lower supply expectations, copper prices broke the 80,000 mark, the main Shanghai copper climbed to 81,050 yuan/ton, a new high in 18 years. Looking at its trend, following the macro sentiment fluctuation, short-term 80,000 or peak, will repeatedly test the 80,000 barrier resistance.
As a commodity second only to copper, aluminum has also been strong recently, in early April, the main force of Shanghai aluminum broke through the 20,000 yuan/ton mark, and under the influence of the British and American sanctions on Russian aluminum sentiment, Lun aluminum refreshed a new high since June 10, 2022 to 2728.00 US dollars/ton, in the background of Lun aluminum strong, the main force of domestic Shanghai aluminum once reached a two-year high of 21345 yuan/ton. However, the subsequent incident may prompt more Russian aluminum to enter China, resulting in domestic supply exceeding expectations, and there are hidden dangers. Recently, the LME aluminum cancellation receipt has increased more than expected, and there is a certain capital manipulation in the market, and it is necessary to be vigilant about the possibility of a pullback of the disk caused by subsequent bull departures; Looking at the overall market demand in the second quarter is still sluggish, 20000 is the "starting point" or "end" of aluminum prices this year?
Electrolytic aluminum production was limited in the first quarter, and production capacity increased in the second quarter
Electrolytic aluminum, as a high energy consumption variety, has a ceiling limit in production capacity, and the current capacity of electrolytic aluminum is close to the ceiling index, and the new capacity is gradually reduced. Domestic electrolytic aluminum production is mainly divided into thermal power, hydropower aluminum. Thermal power aluminum is mainly concentrated in Xinjiang, Inner Mongolia, Shandong and Shanxi, where coal resources are rich, and hydroelectric aluminum is mainly in Yunnan and Guangxi. However, hydropower has obvious seasonality, and the low water period leads to a large fluctuation in electrolytic aluminum production. As of the end of March, China's electrolytic aluminum production capacity was 45.2 million tons/year, the same as the previous year, an increase of 1.1%; The operating capacity is 42.28 million tons/year, and the average operating rate is 93.54%. In the first quarter, the total production capacity resumed 80,000 tons, mainly concentrated in Cloud aluminum and Shenhuo; Entering April, the domestic electrolytic aluminum operating capacity rose, mainly due to the release of the first batch of production resumption in Yunnan is still in execution, Yunnan is about to enter the wet period, the market for Yunnan electrolytic aluminum production resumption is expected, is expected to put into production in the second quarter of about 500,000 tons, production capacity resumption process is also accelerating, electrolytic aluminum production in the second quarter will gradually rise.
The profit of electrolytic aluminum expanded, and the profit per ton exceeded 3,500 yuan
For electrolytic aluminum enterprises, operating costs are mainly power costs and alumina. Electrolytic aluminum is a high energy consumption industry, each ton of electrolytic aluminum needs about 15,000 degrees of electricity. At present, thermal power is still the main force, most electrolytic aluminum enterprises have their own power plants, about 3.2 tons of thermal coal consumption per ton of electrolytic aluminum, as of April 22, the cost of a ton of electrolytic aluminum is about 17,009 yuan/ton, East China electrolytic aluminum market transaction price of 20,690 yuan/ton, electrolytic aluminum per ton gross profit average of about 3,500 yuan. The high profit space also promotes the domestic aluminum enterprises to maintain the stable output of their production capacity, and the supply side is expected to increase or exceed expectations within the year.
The process of the removal of aluminum ingot inventory in China has started, or the price of aluminum has been gradually supported
As of April 22, the domestic social aluminum ingot inventory of 830,000 tons, an increase of 84% from the beginning of January, the total inventory since May last year, a new high; However, from the perspective of seasonal inventory trend, domestic electrolytic aluminum social inventory is still at a low level. In the near future, the social inventory of aluminum ingots will enter the state of destocking, which will support the price of aluminum.
From the demand side, the demand side of electrolytic aluminum in China is mainly construction real estate and transportation industry. The main demand areas are construction real estate, transportation, electricity, consumer goods, machinery and other, accounting for 26%, 24%, 13%, 12%, 12%, 13% respectively.
Real estate completion continued to improve momentum weakened, but the policy released positive signals
At present, the repair of real estate is still relatively sluggish. Real estate is still in the downward cycle, the new construction, construction area is still in a negative growth state. From January to March, the investment in real estate development nationwide was 2.2 trillion yuan, down 9.5 percent year on year. Housing enterprises construction area of 678 million square meters, down 11.1%. The newly started area was 173 million square meters, down 27.8%. The completed area is 153 million square meters, down 20.7%. New home sales area of 227 million square meters, down 19.4% year on year, although the GDP growth in the first quarter exceeded expectations, but the division data is more mediocre, especially the real estate is still not bottomed out, the extent of the economic drag is increasing. However, despite the weak performance of the data, but the country's multi-sector support policy during the year has been continuously released, and the market has certain expectations for the improvement of the real estate situation in the second quarter and even the second half of the year.
Cars remain a strong support for aluminium consumption
In March, automobile production and sales were 2.687 million and 2.694 million, up 78.4% and 70.2% month-on-month, and up 4% and 9.9% year-on-year, respectively. In March, the production and sales of new energy vehicles were 863,000 and 883,000, respectively, an increase of 28.1% and 35.3%, and the market share reached 32.8%. After the holiday, a large number of new cars were listed, offline activities such as auto shows were carried out successively, and promotional policies such as replacing old cars with new ones were introduced in some areas, driving car sales to show rapid growth year-on-year. From January to March, automobile production and sales were completed 660.6 and 6.72 million, respectively, an increase of 6.4% and 10.6%, achieving a good start in the first quarter.
From the trend point of view, the correction is only brief, late we still firmly believe that bullish, even if high profits, low demand, in the face of the reality of negative growth in real estate completion, but in the new energy vehicles and power construction growth, electrolytic aluminum demand will remain stable, in addition to the consumer goods "old for new" program has been repeatedly emphasized, superimposed consumption season, demand potential benefits continue. The performance in the first half of 2024 still exceeds expectations; Shanghai aluminum is temporarily concerned about the 20000 mark support level, and the possibility of breaking through 21000 again in the later stage is still relatively large.
