[agency Review] Galaxy Futures: alumina stops falling, bounces back, consumption recovers and boosts Aluminum prices-Shanghai Metals Market

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[agency Review] Galaxy Futures: alumina stops falling, bounces back, consumption recovers and boosts Aluminum prices

Translation 10:21:30AM May 16, 2019 Source:Galactic futures

Part I Market Research and judgment

The higher-than-expected improvement in China's economic data in March has heightened expectations that the economy is bottoming out and stabilizing, and signs of a seasonal recovery on the consumer side are becoming clearer. However, because the market has fully predicted the current round of positive, so the higher-than-expected improvement in macro data is not reflected in the price, on the contrary, there is a profit selling in the stock market or copper price, which is more sensitive to the macro-economics. however, because the market has fully predicted the current round of positive results, the higher-than-expected improvement in macro data is not reflected in the price. It can be seen that the rebound in aluminum prices is more caused by fundamental contradictions, as the macro policy into the window wait-and-see period, the late price trend will be more dependent on the guidance of fundamentals.

Looking forward to the aluminum market in May, it is difficult for domestic mines to do more under the strict control of environmental protection supervision and safety supervision, and the continued tightening of supply has kept prices stable at high levels. However, due to the significant increase in the matching degree of imported ores and the sharp decline in lye prices, expectations of limited alumina production capacity have been dashed. With the continuous improvement of production efficiency, alumina production capacity release is expected to continue to increase, after the phased rebound, alumina may return to the decline. Although the continuous return of production on the demand side is constantly cashed in the reality of continuous decline in inventory, the squeeze effect of the excessive rise in raw material prices on downstream profits is becoming increasingly prominent. If the shape of the inventory conversion does not continue to cooperate with the policy side, the pace of de-conversion in the future may slow down again, thus dragging down the performance of aluminum prices. In short, the phased support on the cost side is not as solid as expected, and the recovery in consumption is also likely to turn cold dynamically. However, in the context of the overall warm market atmosphere, even if bearish is not recommended to short. We expect the operating range of Shanghai Aluminum to be between 13800 and 14400 in May.

Risk tip: raw material prices fell more than expected, downstream consumption slowed again.

The second part is a review of the market.

Futures market

There was a marked divergence in the trend of domestic and foreign aluminum prices in April, especially since mid-April, driven by optimistic expectations that China's economy has bottomed out and stabilized, Shanghai Aluminum has risen one after another and hit a new high in the year. On the other hand, Lunal entered a negative trend under the influence of the expected resumption of production at the Hydro alumina plant. As of April 26, Shanghai Aluminum closed at 14185 yuan / ton, a monthly increase of 3.39% to 1860 US dollars / ton, a monthly decline of 2.64%. The domestic and foreign exchange rate was significantly lower than that of the previous month. As the macro policy side enters the window wait-and-see period, the trend of aluminum prices in May is likely to be more dependent on the fundamentals of the status quo. Buoyed by expectations of a pick-up in consumption, Shanghai Aluminum Operation is expected to remain high.

Chart 1:LME aluminum March trend chart

Data sources: Galaxy Futures, wind Information

Figure 2: trend chart of Shanghai Aluminum main Company

Data sources: Galaxy Futures, wind Information

Spot trend

The decline in alumina prices slowed in April and rebounded in late April. As of April 26, the prices of alumina in Henan, Guiyang and Shanxi were 2745, 2705 and 2745 yuan / ton, respectively, up about 18 yuan / ton from the previous month. In April, dragged down by the imbalance between supply and demand structure of alumina, alumina prices continued to decline on inertia. At the beginning of the month, under the influence of the VAT reduction policy, the main body of the market transaction has a great difference on the price, and the buyer is more willing to reduce the price by virtue of the advantage of the buyer. Under the drag of the surplus pattern, the price effect is not ideal, which makes the transaction price fall back continuously. Then the policy impact gradually came out, the market transaction appeared obvious improvement, and the large order focused on the rigid demand procurement of the unmatched electrolytic aluminum plant, and the continuous improvement of liquidity gradually supported the alumina price. With the general recognition of the price rise, the seller's sentiment of cherishing and selling has also increased at the same time, thus causing the price to continue to rise. Although in the case of sharp compression of production profits, it is normal to ask for profits through the industrial chain. However, the overall surplus situation of the alumina industry has not fundamentally changed, and the normal recovery of the net importing countries has also made the domestic surplus situation more severe. In the case of a sharp decline in the price of raw materials such as lye, the rapid increase in alumina production capacity is still expected to be strong. Therefore, the rebound from the end of April may be limited, the medium-and long-term downward trend still exists.

The spot price of aluminum ingots in April continued the rising trend in March. As of April 26, the spot price of A00 aluminum ingots on the Yangtze River was quoted at 14180 yuan / ton, up 220 yuan / ton from the end of last month. Spot discount of 10 yuan per ton for the current month, down 340 yuan per ton compared with the previous month. In early April, under the influence of the reduction of value-added tax, the demand of some enterprises was in front, making the market relatively light in the first ten days of the year. Subsequently, under the boost of the sustained release of terminal consumption, spot aluminum prices began to run on the strong side. With the continued rise in absolute prices, spot discount has also been further narrowed to near Pingshui. In late April, Labour Day short holiday's inventory boom also arrived as scheduled, pushing prices up again. However, given that the current aluminum prices have climbed to a high for the year, the fear of high terminal consumption has also gradually intensified, so we expect the spot water rise in May may fall back again.

Figure 3: domestic alumina price

Data sources: Galaxy Futures, wind Information

Figure 4: spot aluminum prices and rising stickers

Data sources: Galaxy Futures, wind Information

Inventory data

As of April 26, LME aluminum stocks were 1020875 tons, down 128850 tons from the end of last month. Social inventories of aluminum ingots in major areas of the country totaled 1.521 million tons, down 141000 tons from the previous month. Domestic inventories were recalibrated in April, buoyed by a cut in value-added tax and a seasonal recovery in terminal consumption. However, considering that the continued repair of aluminum plant profits is causing the continued release of new capacity, and the continuous upward rise in absolute aluminum prices will also inhibit some terminal demand, we expect the inventory decline to be narrowed in the later period, but the inventory cycle will continue to be maintained.

Figure 5:LME aluminum inventory

Data sources: Galaxy Futures, wind Information

Figure 6: social inventory of aluminum ingots

Data sources: Galaxy Futures, wind Information

The third part is the analysis of supply and demand.

Supply side

In March, the total domestic alumina production capacity was 83.97 million tons, the operating capacity was 69.61 million tons, and the operating rate was 82.9 per cent. In March, the domestic alumina output was 6.19 million tons, and the daily output was 199600 tons, and the average daily output was 4300 tons lower than that in February. Due to the continuous loss of alumina production profit in March, the industry capacity adjustment is more frequent. Each enterprise makes the dynamic adjustment according to its own management condition, some temporarily suspend production and maintenance due to ore supply or equipment failure, and some increase the matching degree of imported ore after the lye price drops sharply to improve the enthusiasm of production. In a word, the structure of alumina industry changed dramatically in March, but most of the capacity changes are temporary maintenance, the impact cycle will be less than a month, so in terms of actual output, the change of overall output is relatively limited. We expect alumina production to be about 5.72 million tons in April.

From the perspective of import and export, according to customs data, alumina exports in March were 4400 tons, up 29 percent from February and 28 percent from 2018. Imports of alumina in March were 30, 000 tons, down 45% from February, up 268% from March 18, and net exports of alumina in March were 25600 tons. In March, alumina continued its net imports since February. Expectations of supply shortages in overseas markets are improving as EGA goes into production and expectations of a resumption of production at the Hydro plant in Brazil continue to ferment. At the same time, the continued rise in domestic port stocks has also continued to put pressure on overseas prices. In the case of the gradual narrowing of the internal and external price gap, the future export is no longer possible, and the probability of opening the import window is gradually increasing. Therefore, without external interference, we expect alumina imports to continue to pick up in April.

Figure 7: total production capacity and operating rate of alumina in China

Data sources: Galaxy Futures, wind Information

Figure 8: domestic alumina production

Data sources: Galaxy Futures, Wind Information

In terms of electrolytic aluminum, the total domestic electrolytic aluminum production capacity in March was 40.574 million tons, an increase of 340000 tons over February; the operating capacity was 36.536 million tons, an increase of 240000 tons over February; and the operating rate was 90.05 per cent. In March, the domestic electrolytic aluminum output was 3.05 million tons and the daily output was 98400 tons, which was not much different from that in February. Driven by the continuous rise in aluminum prices, more new electrolytic aluminum projects were put into production in March, and enterprises such as Debao and Yunnan Aluminum Heqing all had varying degrees of capacity release, and the production limit part of the heating season in Weiqiao, Shandong Province was also gradually resuming production. With the continuous repair of the profits of the aluminum plant, the whole industry has generally entered a profitable state. Under the direct stimulation of production benefits, we expect the electrolytic aluminum production to reach 2.98 million tons in April.

Figure 9: total production and operation rate of electrolytic aluminum in China

Data sources: Galaxy Futures, Wind Information

Figure 10: domestic electrolytic aluminum production

Data sources: Galaxy Futures, wind Information

Smelting profit

As of April 26, according to the prices of the day, the average full cost of smelting in electrolytic aluminum enterprises is about 13860 yuan, down about 52 yuan per ton compared with the previous month. Although the coal market under the influence of safety regulation, prices continue to rebound. However, this year, a new round of network and electricity price negotiations have been relatively smooth, multi-land electricity prices have been clearly reduced. At present, the average price of anode in China has dropped to 3420 yuan / ton, which is about 168yuan / ton lower than that of the previous month. The price of aluminum fluoride fell to 8600 yuan per ton, down 1400 yuan per ton from the previous month. Because the proportion of anode and aluminum fluoride and other auxiliary materials in the cost of electrolytic aluminum is small, the main reason for the decrease of electrolytic aluminum cost in April is still due to the decline of alumina price. However, at present, the domestic alumina price has rebounded in stages, with the continuous recovery of alumina prices, the cost center of gravity is moving up again. With the sharp rise in aluminum prices, smelting profits continue to improve. Considering that after the aluminum plant profits are repaired, the middle and upper reaches of the industry will again demand profits from the end of the industrial chain, so we expect that the reduction in electrolytic aluminum smelting costs in May will be difficult to continue to decline, and the profit margin will be narrowed again.

Figure 11: profit from electrolytic aluminum smelting

Data source: Galaxy futures

Demand side

According to the survey data of Shanghai Color Network, the operating rate of aluminum profile enterprises in China in March was 60.4%. In March, the operating rate of aluminum sheet, strip and foil enterprises was 74.8%. Compared with the same period in 2018, the operating rate of profile enterprises rebounded more obviously in March, especially in industrial profile enterprises. Although consumption of construction profiles picked up in March, the recovery is still weaker than in previous years. This year, the recovery of photovoltaic profiles is more significant, and even the conversion of building materials to photovoltaic materials. While the aluminum sheet, strip and foil enterprises in the case of seasonal demand recovery, the operating rate is still maintained at a high level, but the growth rate is not obvious compared with the previous month. On the one hand, due to the impact of environmental protection policies, the enterprise start-up rate rebounded slowly. On the other hand, it is dragged down by the weak growth of domestic consumption, and the overall consumption is relatively flat. In short, the overall domestic aluminum terminal consumption improved in March, with the continuation of the peak consumer season in April, the starting rate of all types of enterprises is expected to remain high.

From an export point of view, unforged aluminum and aluminum exports in March were 546000 tons, up 21.33 per cent from a year earlier. Aluminum exports fell sharply in February as a result of the Chinese New year holiday. As the opening rate continued to recover after the March holiday, orders that were not processed in time in February were delayed to March, leading to a sharp rebound in the export data for March. However, given that there are still too many uncertainties in the outlook for global economic growth, the export data for April are likely to fall back again.

Figure 12: domestic aluminum production

Data sources: Galaxy Futures, wind Information

Figure 13: unforged aluminium and aluminium exports

Data sources: Galaxy Futures, Wind Information

From the perspective of the real estate market, from January to March 2019, investment in real estate development nationwide totaled 2.3803 trillion yuan, an increase of 11.8 percent over the same period last year, and the growth rate was 0.2 percentage points higher than that from January to February. Of this total, residential investment totaled 1.7256 trillion yuan, an increase of 17.3 percent, and the growth rate dropped by 0.7 percentage points. Residential investment accounted for 72.5% of real estate development investment. From January to March, the area of housing completed was 184.74 million square meters, down 10.8 percent, or 1.1 percent. Of this total, the completed area of housing was 130.43 million square meters, down 8.1 per cent. From January to March, the sales area of commercial housing was 298.29 million square meters, down 0.9 percent from the same period last year, a decrease of 2.7 percentage points from January to February. Among them, residential sales area decreased by 0.6%, office building sales area decreased by 11.1%, and commercial business housing sales area decreased by 6.9%. In March, the real estate development boom index was 100.78, up 0.21 points from February. Since the beginning of 2019, the growth rate of real estate investment has picked up more significantly than last year, especially since mid-March, under the laissez-faire of many local governments to "tighten openly and relax secretly", the phenomenon of marginal recovery of the real estate market is more common. On the occasion of the collective recovery of the national property market, the meeting of the political Bureau of the CPC Central Committee reiterated once again that "housing does not speculate" and "implement the policy of one city for one city, because of the policy of the city." subsequently, the regulation and control policies of many local governments were released one after another, cooling the expectations of a recovery in the property market again. From the current attitude of the central government, stable land prices, stable housing prices, stable expectations are still the focus of the current real estate market. Under the strict control of credit and other regulatory policies, it is difficult for the real estate market to improve significantly, and the consumption growth rate of construction profiles is likely to remain low.

In terms of the auto industry, car production was 2.558 million in March, down 2.73 per cent from a year earlier. Car sales in March were 2.52 million, down 5.18 per cent from a year earlier. Car production and sales data showed a marginal recovery in March, but remained at negative growth. Recently, the National Development and Reform Commission issued a draft of the implementation Plan for promoting the Renewal of consumption of Automobile, Home Appliances and Consumer Electronic products and promoting the Development of Circular economy (2019-2020), among which there are a number of policies to stimulate automobile consumption. Under the boost of the policy support, car consumption is expected to stabilize and pick up in the later period. However, before the formal implementation of the policy, the depressed trend of the automobile industry is expected to continue, and the pulling effect on the relevant aluminum is relatively limited.

Figure 14: cumulative and cumulative investment in real estate development compared with the same period last year

Data sources: Galaxy Futures, Wind Information

Figure 15: car production and year-on-year

Data sources: Galaxy Futures, wind Information

Key Words:  Aluminum  price  alumina  LME aluminum 

[agency Review] Galaxy Futures: alumina stops falling, bounces back, consumption recovers and boosts Aluminum prices

Translation 10:21:30AM May 16, 2019 Source:Galactic futures

Part I Market Research and judgment

The higher-than-expected improvement in China's economic data in March has heightened expectations that the economy is bottoming out and stabilizing, and signs of a seasonal recovery on the consumer side are becoming clearer. However, because the market has fully predicted the current round of positive, so the higher-than-expected improvement in macro data is not reflected in the price, on the contrary, there is a profit selling in the stock market or copper price, which is more sensitive to the macro-economics. however, because the market has fully predicted the current round of positive results, the higher-than-expected improvement in macro data is not reflected in the price. It can be seen that the rebound in aluminum prices is more caused by fundamental contradictions, as the macro policy into the window wait-and-see period, the late price trend will be more dependent on the guidance of fundamentals.

Looking forward to the aluminum market in May, it is difficult for domestic mines to do more under the strict control of environmental protection supervision and safety supervision, and the continued tightening of supply has kept prices stable at high levels. However, due to the significant increase in the matching degree of imported ores and the sharp decline in lye prices, expectations of limited alumina production capacity have been dashed. With the continuous improvement of production efficiency, alumina production capacity release is expected to continue to increase, after the phased rebound, alumina may return to the decline. Although the continuous return of production on the demand side is constantly cashed in the reality of continuous decline in inventory, the squeeze effect of the excessive rise in raw material prices on downstream profits is becoming increasingly prominent. If the shape of the inventory conversion does not continue to cooperate with the policy side, the pace of de-conversion in the future may slow down again, thus dragging down the performance of aluminum prices. In short, the phased support on the cost side is not as solid as expected, and the recovery in consumption is also likely to turn cold dynamically. However, in the context of the overall warm market atmosphere, even if bearish is not recommended to short. We expect the operating range of Shanghai Aluminum to be between 13800 and 14400 in May.

Risk tip: raw material prices fell more than expected, downstream consumption slowed again.

The second part is a review of the market.

Futures market

There was a marked divergence in the trend of domestic and foreign aluminum prices in April, especially since mid-April, driven by optimistic expectations that China's economy has bottomed out and stabilized, Shanghai Aluminum has risen one after another and hit a new high in the year. On the other hand, Lunal entered a negative trend under the influence of the expected resumption of production at the Hydro alumina plant. As of April 26, Shanghai Aluminum closed at 14185 yuan / ton, a monthly increase of 3.39% to 1860 US dollars / ton, a monthly decline of 2.64%. The domestic and foreign exchange rate was significantly lower than that of the previous month. As the macro policy side enters the window wait-and-see period, the trend of aluminum prices in May is likely to be more dependent on the fundamentals of the status quo. Buoyed by expectations of a pick-up in consumption, Shanghai Aluminum Operation is expected to remain high.

Chart 1:LME aluminum March trend chart

Data sources: Galaxy Futures, wind Information

Figure 2: trend chart of Shanghai Aluminum main Company

Data sources: Galaxy Futures, wind Information

Spot trend

The decline in alumina prices slowed in April and rebounded in late April. As of April 26, the prices of alumina in Henan, Guiyang and Shanxi were 2745, 2705 and 2745 yuan / ton, respectively, up about 18 yuan / ton from the previous month. In April, dragged down by the imbalance between supply and demand structure of alumina, alumina prices continued to decline on inertia. At the beginning of the month, under the influence of the VAT reduction policy, the main body of the market transaction has a great difference on the price, and the buyer is more willing to reduce the price by virtue of the advantage of the buyer. Under the drag of the surplus pattern, the price effect is not ideal, which makes the transaction price fall back continuously. Then the policy impact gradually came out, the market transaction appeared obvious improvement, and the large order focused on the rigid demand procurement of the unmatched electrolytic aluminum plant, and the continuous improvement of liquidity gradually supported the alumina price. With the general recognition of the price rise, the seller's sentiment of cherishing and selling has also increased at the same time, thus causing the price to continue to rise. Although in the case of sharp compression of production profits, it is normal to ask for profits through the industrial chain. However, the overall surplus situation of the alumina industry has not fundamentally changed, and the normal recovery of the net importing countries has also made the domestic surplus situation more severe. In the case of a sharp decline in the price of raw materials such as lye, the rapid increase in alumina production capacity is still expected to be strong. Therefore, the rebound from the end of April may be limited, the medium-and long-term downward trend still exists.

The spot price of aluminum ingots in April continued the rising trend in March. As of April 26, the spot price of A00 aluminum ingots on the Yangtze River was quoted at 14180 yuan / ton, up 220 yuan / ton from the end of last month. Spot discount of 10 yuan per ton for the current month, down 340 yuan per ton compared with the previous month. In early April, under the influence of the reduction of value-added tax, the demand of some enterprises was in front, making the market relatively light in the first ten days of the year. Subsequently, under the boost of the sustained release of terminal consumption, spot aluminum prices began to run on the strong side. With the continued rise in absolute prices, spot discount has also been further narrowed to near Pingshui. In late April, Labour Day short holiday's inventory boom also arrived as scheduled, pushing prices up again. However, given that the current aluminum prices have climbed to a high for the year, the fear of high terminal consumption has also gradually intensified, so we expect the spot water rise in May may fall back again.

Figure 3: domestic alumina price

Data sources: Galaxy Futures, wind Information

Figure 4: spot aluminum prices and rising stickers

Data sources: Galaxy Futures, wind Information

Inventory data

As of April 26, LME aluminum stocks were 1020875 tons, down 128850 tons from the end of last month. Social inventories of aluminum ingots in major areas of the country totaled 1.521 million tons, down 141000 tons from the previous month. Domestic inventories were recalibrated in April, buoyed by a cut in value-added tax and a seasonal recovery in terminal consumption. However, considering that the continued repair of aluminum plant profits is causing the continued release of new capacity, and the continuous upward rise in absolute aluminum prices will also inhibit some terminal demand, we expect the inventory decline to be narrowed in the later period, but the inventory cycle will continue to be maintained.

Figure 5:LME aluminum inventory

Data sources: Galaxy Futures, wind Information

Figure 6: social inventory of aluminum ingots

Data sources: Galaxy Futures, wind Information

The third part is the analysis of supply and demand.

Supply side

In March, the total domestic alumina production capacity was 83.97 million tons, the operating capacity was 69.61 million tons, and the operating rate was 82.9 per cent. In March, the domestic alumina output was 6.19 million tons, and the daily output was 199600 tons, and the average daily output was 4300 tons lower than that in February. Due to the continuous loss of alumina production profit in March, the industry capacity adjustment is more frequent. Each enterprise makes the dynamic adjustment according to its own management condition, some temporarily suspend production and maintenance due to ore supply or equipment failure, and some increase the matching degree of imported ore after the lye price drops sharply to improve the enthusiasm of production. In a word, the structure of alumina industry changed dramatically in March, but most of the capacity changes are temporary maintenance, the impact cycle will be less than a month, so in terms of actual output, the change of overall output is relatively limited. We expect alumina production to be about 5.72 million tons in April.

From the perspective of import and export, according to customs data, alumina exports in March were 4400 tons, up 29 percent from February and 28 percent from 2018. Imports of alumina in March were 30, 000 tons, down 45% from February, up 268% from March 18, and net exports of alumina in March were 25600 tons. In March, alumina continued its net imports since February. Expectations of supply shortages in overseas markets are improving as EGA goes into production and expectations of a resumption of production at the Hydro plant in Brazil continue to ferment. At the same time, the continued rise in domestic port stocks has also continued to put pressure on overseas prices. In the case of the gradual narrowing of the internal and external price gap, the future export is no longer possible, and the probability of opening the import window is gradually increasing. Therefore, without external interference, we expect alumina imports to continue to pick up in April.

Figure 7: total production capacity and operating rate of alumina in China

Data sources: Galaxy Futures, wind Information

Figure 8: domestic alumina production

Data sources: Galaxy Futures, Wind Information

In terms of electrolytic aluminum, the total domestic electrolytic aluminum production capacity in March was 40.574 million tons, an increase of 340000 tons over February; the operating capacity was 36.536 million tons, an increase of 240000 tons over February; and the operating rate was 90.05 per cent. In March, the domestic electrolytic aluminum output was 3.05 million tons and the daily output was 98400 tons, which was not much different from that in February. Driven by the continuous rise in aluminum prices, more new electrolytic aluminum projects were put into production in March, and enterprises such as Debao and Yunnan Aluminum Heqing all had varying degrees of capacity release, and the production limit part of the heating season in Weiqiao, Shandong Province was also gradually resuming production. With the continuous repair of the profits of the aluminum plant, the whole industry has generally entered a profitable state. Under the direct stimulation of production benefits, we expect the electrolytic aluminum production to reach 2.98 million tons in April.

Figure 9: total production and operation rate of electrolytic aluminum in China

Data sources: Galaxy Futures, Wind Information

Figure 10: domestic electrolytic aluminum production

Data sources: Galaxy Futures, wind Information

Smelting profit

As of April 26, according to the prices of the day, the average full cost of smelting in electrolytic aluminum enterprises is about 13860 yuan, down about 52 yuan per ton compared with the previous month. Although the coal market under the influence of safety regulation, prices continue to rebound. However, this year, a new round of network and electricity price negotiations have been relatively smooth, multi-land electricity prices have been clearly reduced. At present, the average price of anode in China has dropped to 3420 yuan / ton, which is about 168yuan / ton lower than that of the previous month. The price of aluminum fluoride fell to 8600 yuan per ton, down 1400 yuan per ton from the previous month. Because the proportion of anode and aluminum fluoride and other auxiliary materials in the cost of electrolytic aluminum is small, the main reason for the decrease of electrolytic aluminum cost in April is still due to the decline of alumina price. However, at present, the domestic alumina price has rebounded in stages, with the continuous recovery of alumina prices, the cost center of gravity is moving up again. With the sharp rise in aluminum prices, smelting profits continue to improve. Considering that after the aluminum plant profits are repaired, the middle and upper reaches of the industry will again demand profits from the end of the industrial chain, so we expect that the reduction in electrolytic aluminum smelting costs in May will be difficult to continue to decline, and the profit margin will be narrowed again.

Figure 11: profit from electrolytic aluminum smelting

Data source: Galaxy futures

Demand side

According to the survey data of Shanghai Color Network, the operating rate of aluminum profile enterprises in China in March was 60.4%. In March, the operating rate of aluminum sheet, strip and foil enterprises was 74.8%. Compared with the same period in 2018, the operating rate of profile enterprises rebounded more obviously in March, especially in industrial profile enterprises. Although consumption of construction profiles picked up in March, the recovery is still weaker than in previous years. This year, the recovery of photovoltaic profiles is more significant, and even the conversion of building materials to photovoltaic materials. While the aluminum sheet, strip and foil enterprises in the case of seasonal demand recovery, the operating rate is still maintained at a high level, but the growth rate is not obvious compared with the previous month. On the one hand, due to the impact of environmental protection policies, the enterprise start-up rate rebounded slowly. On the other hand, it is dragged down by the weak growth of domestic consumption, and the overall consumption is relatively flat. In short, the overall domestic aluminum terminal consumption improved in March, with the continuation of the peak consumer season in April, the starting rate of all types of enterprises is expected to remain high.

From an export point of view, unforged aluminum and aluminum exports in March were 546000 tons, up 21.33 per cent from a year earlier. Aluminum exports fell sharply in February as a result of the Chinese New year holiday. As the opening rate continued to recover after the March holiday, orders that were not processed in time in February were delayed to March, leading to a sharp rebound in the export data for March. However, given that there are still too many uncertainties in the outlook for global economic growth, the export data for April are likely to fall back again.

Figure 12: domestic aluminum production

Data sources: Galaxy Futures, wind Information

Figure 13: unforged aluminium and aluminium exports

Data sources: Galaxy Futures, Wind Information

From the perspective of the real estate market, from January to March 2019, investment in real estate development nationwide totaled 2.3803 trillion yuan, an increase of 11.8 percent over the same period last year, and the growth rate was 0.2 percentage points higher than that from January to February. Of this total, residential investment totaled 1.7256 trillion yuan, an increase of 17.3 percent, and the growth rate dropped by 0.7 percentage points. Residential investment accounted for 72.5% of real estate development investment. From January to March, the area of housing completed was 184.74 million square meters, down 10.8 percent, or 1.1 percent. Of this total, the completed area of housing was 130.43 million square meters, down 8.1 per cent. From January to March, the sales area of commercial housing was 298.29 million square meters, down 0.9 percent from the same period last year, a decrease of 2.7 percentage points from January to February. Among them, residential sales area decreased by 0.6%, office building sales area decreased by 11.1%, and commercial business housing sales area decreased by 6.9%. In March, the real estate development boom index was 100.78, up 0.21 points from February. Since the beginning of 2019, the growth rate of real estate investment has picked up more significantly than last year, especially since mid-March, under the laissez-faire of many local governments to "tighten openly and relax secretly", the phenomenon of marginal recovery of the real estate market is more common. On the occasion of the collective recovery of the national property market, the meeting of the political Bureau of the CPC Central Committee reiterated once again that "housing does not speculate" and "implement the policy of one city for one city, because of the policy of the city." subsequently, the regulation and control policies of many local governments were released one after another, cooling the expectations of a recovery in the property market again. From the current attitude of the central government, stable land prices, stable housing prices, stable expectations are still the focus of the current real estate market. Under the strict control of credit and other regulatory policies, it is difficult for the real estate market to improve significantly, and the consumption growth rate of construction profiles is likely to remain low.

In terms of the auto industry, car production was 2.558 million in March, down 2.73 per cent from a year earlier. Car sales in March were 2.52 million, down 5.18 per cent from a year earlier. Car production and sales data showed a marginal recovery in March, but remained at negative growth. Recently, the National Development and Reform Commission issued a draft of the implementation Plan for promoting the Renewal of consumption of Automobile, Home Appliances and Consumer Electronic products and promoting the Development of Circular economy (2019-2020), among which there are a number of policies to stimulate automobile consumption. Under the boost of the policy support, car consumption is expected to stabilize and pick up in the later period. However, before the formal implementation of the policy, the depressed trend of the automobile industry is expected to continue, and the pulling effect on the relevant aluminum is relatively limited.

Figure 14: cumulative and cumulative investment in real estate development compared with the same period last year

Data sources: Galaxy Futures, Wind Information

Figure 15: car production and year-on-year

Data sources: Galaxy Futures, wind Information

Key Words:  Aluminum  price  alumina  LME aluminum