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[SMM Analysis] Aluminum rod processing fee: why is Guangdong alone strong?
Jul 23,2019 18:50CST
translation
Source:SMM
Why is the performance of aluminum rod processing fees in Guangdong strong in the context of weaker consumption?
The content below was translated by Tencent automatically for reference.

SMM recently learned from exchanges with local aluminum rod manufacturers and traders that aluminum bar processing fees in Baotou, Shandong and Wuxi have been reduced by between 30 and 100 yuan per ton, while there has been no significant change or even a small increase in aluminum bar processing fees in Guangdong during the same period. Why is the performance of aluminum rod processing fees in Guangdong strong in the context of weaker consumption?

The main results are as follows: 1) Guangdong is the concentrated place of aluminum profile factory, and the degree of consumption weakening is lighter than that in the north. Guangdong Province, such as Foshan, Zhaoqing and other areas of aluminum profile factories are more concentrated, and the annual output of more than 100000 tons of large plants, the consumption of aluminum bars is larger, which can be seen from the inventory trend chart of the following places, the decline of aluminum bar inventory in Guangdong is more obvious than that in other regions, while in the north, such as Baotou and Henan, there are fewer profile factories, and after entering the off-season of consumption, aluminum rod orders become weaker in Chengdu. With a certain degree of consumption support, its price is relatively stable.

2) the price of aluminum in East and South China is hung upside down. Because of the upside down of aluminum prices, in order to ensure profit margins and maintain normal operation between different business regions, local traders and manufacturers in Guangdong often raise the processing fees for aluminum bars. The author transferred the spot transaction price of aluminum ingots from East and South China to find that the high price difference between Guangdong and Shanghai is close to 115 yuan / ton (June 11, 2019), but recently the price in South China is lower than that in East China. The inverted price difference is close to 30 yuan / ton (July 22).

 

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