In November, the domestic Shanghai aluminum futures price showed a fluctuating upward trend as a whole. Due to the spread of the epidemic in many places in China, the social inventory of electrolytic aluminum in China has affected transportation. In November, there was a trend of destocking. The inventory of the previous exchange and the aluminum inventory of LME also maintained a downward trend.
Bauxite imports increased month-on-month
According to data from the General Administration of Customs, my country imported 8.9754 million tons of bauxite in October, a month-on-month increase of 9.37% and a year-on-year decrease of 5.5%. From January to October, my country imported 103.6627 million tons of bauxite, a year-on-year increase of 13.98%.
In October, my country imported 4.4134 million tons of bauxite from Guinea, accounting for 49% of the total import volume, a month-on-month increase of 6.38%; my country imported 3.3091 million tons of bauxite from Australia, accounting for 37% of the total import volume, a month-on-month increase of 22.3%; my country imported 1.0629 million tons of bauxite from Indonesia, accounting for 12% of the total import volume, an increase of 20.88% from the previous month. In October, the price of bauxite ran at a high level, and the overall supply was relatively tight. The scale of newly-commissioned alumina projects in China has expanded, and the demand for bauxite is still growing.
Alumina production growth
According to data from the National Bureau of Statistics, in October, domestic alumina production was 7.108 million tons, a year-on-year increase of 12.8%. From January to October, the cumulative domestic alumina output was 68.579 million tons, a year-on-year increase of 5.1%. Among them, alumina production in Shandong decreased by 0.4% year-on-year, while alumina production in Shanxi and Guangxi increased by 4.74% and 13.5% year-on-year respectively. In October, the domestic alumina operating capacity was 78.605 million tons, and the operating rate of alumina plants across the country was 81.1%.
There is an overall surplus of alumina, the output of electrolytic aluminum is expected to decline, and the scale of production reduction may be expanded, and the demand for alumina is showing a downward trend. Affected by the continuous increase in raw material prices and the slump in domestic alumina prices, alumina profits continued to decline, and the proportion of losses in domestic alumina enterprises increased. In some areas, alumina plants suffered overall losses, and 80% of alumina enterprises were near breakeven. If the losses in the alumina industry increase in the future, more alumina production capacity may choose to withdraw.
China’s alumina market still presents a net import. According to data from the General Administration of Customs, in October, my country imported 250,700 tons of alumina, a month-on-month increase of 0.76%, and a year-on-year increase of 14.25%; from January to October, my country imported a total of 1.701 million tons of alumina, a year-on-year decrease of 41.61%. In October, my country exported 58,700 tons of alumina, a month-on-month decrease of 32.22%, and a year-on-year increase of 930.99%; from January to October, my country’s cumulative export of alumina was 756,600 tons, a year-on-year increase of 699.91%. Although there is a surplus of domestic alumina, the periodic price difference stimulates domestic alumina imports.
In November, the domestic alumina price continued to fall, and the price difference between domestic and foreign alumina still existed. Some electrolytic aluminum enterprises resumed production relatively slowly. Domestic alumina may maintain a pattern of oversupply, while imported alumina may not have much demand. In October, the export volume of domestic alumina decreased significantly. Affected by factors such as cost, epidemic situation, and environmental protection, alumina plants in northern my country have reduced and stopped production to varying degrees. The market mainly fulfills long-term orders, and exports are restrained to a certain extent. Exchange rate fluctuations are beneficial to alumina exports within a certain period of time. In November, domestic alumina exports may increase.
The output of electrolytic aluminum increased year-on-year
According to the National Bureau of Statistics, in October, the domestic output of electrolytic aluminum was 3.449 million tons, a year-on-year increase of 9.5%; from January to October, the domestic output of electrolytic aluminum was 33.329 million tons, a year-on-year increase of 3.3%, and the output of electrolytic aluminum increased compared with the same period in previous years. In November, domestic high-cost electrolytic aluminum plants are expected to reduce production, and some electrolytic aluminum plants in Sichuan have resumed production. Overall, in November, domestic electrolytic aluminum production capacity may increase slightly.
Customs data show that in October, my country imported 67,400 tons of electrolytic aluminum, a month-on-month increase of 4.27%, and a year-on-year decrease of 51.78%; from January to October, my country imported a total of 429,700 tons of electrolytic aluminum, a year-on-year decrease of 66.11%. The main import source countries are Russia, Iran, and the United Arab Emirates.
The downstream operating rate decreased month-on-month
In October, the operating rate of domestic aluminum profile enterprises was 39.53%, a month-on-month decrease of 0.19%, and a year-on-year decrease of 12.6%. The overall operating rate of aluminum profile enterprises across the country did not change much. Among them, the national output of aluminum rods was 1.19 million tons, and the operating rate of enterprises was 65.5%, a decrease of 0.63% from September. In October, some aluminum rod factories in Henan stopped production, and the operating rate dropped significantly.
In October, the operating rate of domestic recycled aluminum alloy enterprises was 53.2%, a decrease of 0.2% from the previous month. The operating rate of the domestic aluminum foil industry was 77.89%, a decrease of 0.17% month-on-month and a year-on-year increase of 9.65%. In October, the operating rate of domestic aluminum strip enterprises was 70.29%, a decrease of 2.98% month-on-month and a year-on-year decrease of 4.20%. Due to the weak state of the real estate industry as a whole, the operating rate of construction profile enterprises is relatively low. The overall operating rate of industrial profile enterprises has not changed much, and the order volume of auto profiles has entered the off-season, and the order volume has declined slowly.
Due to the relatively large interest rate hikes in overseas countries and the weak demand for downstream aluminum products, the terminal market has little demand for domestic aluminum products. According to data from the General Administration of Customs, in October, my country exported 0.64 million tons of electrolytic aluminum, a month-on-month decrease of 66.53%; from January to October, my country exported a total of 192,900 tons of electrolytic aluminum, a year-on-year increase of 187,200 tons. The main exporting countries are Japan, Nigeria, and France. In October, my country exported 457,000 tons of aluminum products, a year-on-year decrease of 1.9% and a month-on-month decrease of 2.7%, which was the third consecutive month of decline.
Among them, my country’s aluminum extrusions and aluminum foil exported 83,000 tons and 114,000 tons respectively, a month-on-month decrease of 10.9% and 4.1%; aluminum strip exports were 257,000 tons, a month-on-month increase of 1.2%. From January to October, my country exported 5.27 million tons of aluminum products, a year-on-year increase of 20.1%. In October, my country exported 74,000 tons of aluminum profiles, a month-on-month decrease of 9,700 tons, or 11.6%, and a year-on-year decrease of 0,300 tons, or 0.43%.
From January to October, my country exported a total of 781,800 tons of aluminum profiles. In October, my country exported 18,000 tons of aluminum alloy, a month-on-month decrease of 16.1%, and a year-on-year increase of 67.2%; my country imported 100,000 tons of aluminum alloy, a month-on-month decrease of 0.4%, and a year-on-year decrease of 15.5%. From January to October, my country exported 186,000 tons of aluminum alloys, a year-on-year increase of 43%; my country imported 1.08 million tons of aluminum alloys, a year-on-year increase of 19.2%.
