Everbright Futures [Aluminum]: Supply and demand shift to aluminum storage support
Last week, aluminum prices fluctuated strongly. On the 11th, Shanghai Aluminum closed at 18755 yuan/ton, a weekly increase of 2.01%.
1. Supply: It is estimated that the operating capacity of domestic electrolytic aluminum in November will be around 40.51 million tons, and the output will be 3.32 million tons. In the dry season, power is tight for fermentation, and the reduction of production in Yunnan and the slow resumption of production in Sichuan are still the main focus, while the resumption of production in Guangxi, Guizhou and other places will be delayed; The heating season in the north is coming, and Henan, Shandong, Shanxi and other places will successively reduce the output by 100000 tons. The total scale of overseas production reduction is expected to rise to 2.03 million tons, including the 80000 ton production line of Ghana VALCO which has been stalled due to maintenance problems in the near future; The Mozal aluminum plant in Mozambique, Africa under South32, was shut down due to an accident, involving a capacity of 290000 tons.
2. Demand: Shandong was partially unsealed, the orders for profile materials recovered, and the weekly operating rate of domestic leading downstream aluminum processing enterprises rose 0.1% to 67.2%. Among them, the operating rate of aluminum profiles rose by 1% to 67.8%, the operating rate of aluminum plates and strips remained stable at 79.6%, and the operating rate of aluminum cables remained stable at 58.2%. The operating rate of primary aluminum alloy remained stable at 64% and that of aluminum foil at 83.3%. Guangdong, Chongqing and other places had stricter control and tighter logistics, and the weekly operating rate of recycled aluminum alloy fell 0.6% to 51%. The processing fees for aluminum rods vary from place to place. Henan remained stable. Wuxi, Xinjiang, Guangdong, Baotou decreased by 30-210 yuan/ton, while Linyi increased by 40 yuan/ton; The aluminum rod processing cost remained stable, and the aluminum alloy increased by 200-450 yuan/ton across the line.
3. Inventory: In terms of the stock of the exchange, LME will drop 25000 tons to 553000 tons weekly; Shanghai Aluminum went to the warehouse for 25000 tons to 136500 tons. In terms of social inventory, last week's accumulated alumina warehouse was 36000 tons to 324000 tons; The aluminum ingots are delivered to the warehouse from 4000 tons to 576000 tons; The aluminum rods are delivered to the warehouse from 5500 tons to 58000 tons.
4. Viewpoint: With the impact of the dry season superimposed on the heating season, the domestic supply increment has entered a downward trend; Downstream demand remains weak, but with the gradual relaxation of management and control, the momentum of warming up is strong; The downward adjustment of the low level of the social treasury is still continuing, and the possibility of stock accumulation in late November will be reduced if the spot is tight. If there is a trend of stock accumulation, it is difficult to see a substantial increase. At present, the fundamentals are largely stable and slightly dynamic, which has a certain support for the recent aluminum price, focusing on changes in the macro situation and the impact of overseas news. The LME sanctions on RUSAL are expected to be implemented in the near future, and we should be alert to the market's intention to correct the expected deviation.
