1、 Fundamental aspects
1. On November 28th, the China Nonferrous Metals Industry Association organized a video briefing on the anti-dumping case against China's aluminum plate and strip by the Gulf Cooperation Council, focusing on introducing the case, unifying ideas, and analyzing countermeasures. Fan Shunke, Deputy Secretary of the Party Committee of China Nonferrous Metals Industry Association, and representatives from the Trade Relief Investigation Bureau of the Ministry of Commerce attended the meeting and delivered speeches.
2. According to data from the International Aluminum Association, global alumina production in October was 12.25 million tons, an increase of 2.17% compared to the previous month, and production in September was 11.99 million tons; The same period of the previous year was 12.21 million tons.
3. From January to October, industrial enterprises above designated size in China achieved a total profit of 6115.42 billion yuan, a year-on-year decrease of 7.8%, which narrowed by 1.2 percentage points compared to the period from January to September.
4. According to foreign media reports, aluminum prices remain stable, resisting the overall downward trend of industrial metals. Traders are concerned that due to China's supply restrictions, there may be a shortage of aluminum supply next year. As China increases its support for the real estate industry, aluminum prices have temporarily risen since hitting a low point last month. The real estate industry is an important global consumer of metals. The expectation that the Federal Reserve will relax monetary policy next year has stimulated the weakening of the US dollar, which also provides support.
5. According to data from the National Bureau of Statistics, China's primary aluminum (electrolytic aluminum) production in October was 3.62 million tons, a year-on-year increase of 6.0%; The production of primary aluminum (electrolytic aluminum) from January to October was 34.46 million tons, a year-on-year increase of 3.7%. At the end of October, some enterprises in Inner Mongolia released new production capacity, bringing a small increase.
6. According to data from the National Bureau of Statistics, the alumina production in October 2023 was 7.053 million tons, a year-on-year increase of 1.3%, while the alumina production in Shanxi region increased by 5.6% year-on-year in October; The cumulative production from January to October was 68.701 million tons, a year-on-year increase of 0.9%. Among them, the top three provinces in terms of production in October were Shandong, Shanxi, and Guangxi. There are two main factors affecting the production of alumina enterprises in October: tight supply of bauxite and equipment maintenance. Some enterprises in Chongqing have also been affected by the suspension of alumina supply.
7. In October 2023, the aluminum production was 5.501 million tons, a year-on-year increase of 8.3%, including 1.1748 million tons in Shandong, 947200 tons in Henan, and 529400 tons in Guangdong; The cumulative production from January to October was 52.048 million tons, a year-on-year increase of 5.7%. In October, less than 50% of aluminum profile enterprises in China started construction, with large factories operating steadily and small and medium-sized enterprises experiencing a decline in operating rates. It is reported that construction profile orders in Guangdong Province increased slightly in October; The photovoltaic profiles have a significant impact in the East China region, with a noticeable decline in corporate orders.
2、 Market Review
The overall trend of Shanghai aluminum in November was relatively consistent with the trend of the external market, showing a trend of rising and falling, oscillating between 18490-19370 yuan/ton, with a monthly cumulative decline of 3.2%, which is relatively large compared to the external market.
At the beginning of the month, Shanghai Aluminum rebounded at a low level due to the arrival of the dry season in Yunnan, and electrolytic aluminum manufacturers reduced production. Under supply side concerns, Shanghai Aluminum continued to rise after breaking through the pressure level of 19000, and even reached a high of 19370 within the previous month. However, the upward trend did not continue. In the low season of aluminum consumption in November, downstream demand was sluggish, and the supply and demand situation was weak. The pressure for aluminum rebound was relatively high, and the macro news was also weak. The expectation of the Federal Reserve's interest rate hike is still in place. Shanghai Aluminum once again fell below 19000 and hovered in the range of 18800-19000. However, at the end of the month, with the departure of bulls, the market fell sharply on the 29th, falling to around 18500, but there was obvious support here.
Recently, the inventory of aluminum ingots in society has once again turned to destocking, and the pressure of accumulating inventory is gradually weakening. In addition, the impact of Yunnan electrolytic aluminum production restrictions may gradually be reflected, which has a certain boosting effect on aluminum spot transactions. From the perspective of short - to medium-term trends, there is not much room for a deep decline in Shanghai aluminum prices. The main force is currently focusing on the frontline support at the 18500 level, and will continue to monitor aluminum ingot inventory and destocking in various regions. It is expected that there will be signs of stabilization in aluminum prices in December, and overall attention is focused on the volatility between 18400-19000.
3、 Inventory aspect
In November, LME aluminum inventory continued to slightly decrease. As of November 30th, LME aluminum inventory reached 459375 tons, a decrease of 15350 tons from the beginning of the month, a decrease of 3.23%. In November, the aluminum inventory of the Shanghai Futures Exchange continued to increase. As of November 24th, the total inventory of aluminum in the Shanghai Futures Exchange reached 120266 tons, an increase of 9247 tons or 8.3% from the end of October.
As of November 30, 2023, the domestic social inventory of electrolytic aluminum was 598000 tons, a decrease of 54000 tons or 8.4% from the beginning of the month; The significant destocking in Gongyi area has effectively driven the further decline of domestic aluminum ingot inventory; Wuxi's overall inventory remains stable; Inventory in Shanghai has slightly decreased; There are signs of accumulated inventory in Foshan area; At the end of the year, market demand may enter a sprint stage, coupled with production restrictions during Yunnan's dry season, and the social inventory of aluminum ingots may maintain a trend of destocking.
4、 Waste market
The spot aluminum price fell sharply in November, with a magnitude of over 500 yuan/ton, and the market once again turned to a discount, but it did not expand; In terms of the recycling market, downstream orders have been poor, and the price of alloy ingots has dropped significantly. In addition, the amount of circulating goods has decreased during the month, and most manufacturers have raised prices to receive goods. The cost has surged again, and the previous easing situation has collapsed. At the end of the year, the market has once again fallen into a stalemate.
In terms of the market, domestic raw material output declined in November, and it is understood that the implementation of new regulations on imported raw materials may be delayed. In the short term, the old regulations will still be implemented, and some ports still impose severe restrictions on raw material imports. The actual import increment is limited, exacerbating the pressure on enterprises to replenish inventory; Under the limitation of raw materials, the market has experienced price increases from the source, and suppliers themselves have already raised their receiving prices, leading to further increases in the receiving prices of enterprises, and the vicious cycle has reappeared; In terms of enterprise start-up, the market continued to be sluggish during the month, and the implementation of policies by relevant departments did not meet expectations in the early stage. The market consumption power was weak, and it followed the downward adjustment of spot prices during the month.
Considering that there are still more than two months left until the end of the year, the enterprise holiday will be advanced. Starting from late December, the enterprise may usher in a centralized stocking period, and some enterprises may start earlier; At that time, the situation of insufficient supply of waste materials may be particularly evident. For the future, it is expected that the phenomenon of hoarding in the recycling market will become increasingly severe as the end of December approaches, and companies will gradually continue to raise prices to receive goods until the end of the year.