According to SMM estimates, the average weekly primary aluminum consumption in the recycled aluminum industry is about 22000 tons, with an addition of about 20 per cent of raw aluminum, which is expected to continue this month. The specific analysis is as follows:
Distribution Map of Price difference between A00 Aluminum and ADC12 from 2015 to 2020
According to SMM research found that since the sharp decline in aluminum prices in mid-March, the price difference between ADC12 and A00 aluminum has rapidly expanded to more than 2000 yuan / ton. At the same time, because the inventory of waste aluminum recyclers is mostly a high-cost source of goods before the Spring Festival, almost all of them remain in a state of cherishing sales. The recycled aluminum industry is forced to increase the proportion of A00 aluminum to hedge costs and replenish raw materials. According to SMM research, since mid-March, the proportion of raw aluminum added by large domestic recycled aluminum enterprises has increased to about 30%, and the average proportion of primary aluminum added by small and medium-sized enterprises has increased to 20%. From a sub-regional point of view, except for the relatively large number of factory corners and imported waste aluminum in South China, the overall shortage of waste aluminum supply is relatively low, and the proportion of A00 aluminum addition is lower, and the proportion of A00 aluminum added in other areas is higher.
According to the output of recycled aluminum industry and the distribution scale of production capacity in 2019, the addition amount of A00 aluminum in recycled aluminum industry in the near future is as follows:
Before this, only a very small number of special grade aluminum ingots need to be added to the original aluminum, and the amount of raw aluminum added to the recycled aluminum industry is almost negligible. Combined with the recent A00 aluminum out-of-warehouse data, about 11.5% of the overall out-of-warehouse data is consumed by recycled aluminum enterprises. From a regional point of view, due to the relatively large supply gap of waste aluminum in Jiangsu, Zhejiang and Shanghai, about 16.2% of the outgoing storage in Jiangsu, Zhejiang and Shanghai is consumed by recycled aluminum enterprises, while the use of raw aluminum in other areas is relatively small.
Taking into account the tight supply of waste aluminum in April (previous analysis: [SMM analysis] the shortage of waste aluminum supply in April or the continuation of raw aluminum consumption in the recycled aluminum industry will be maintained), it is expected that the price difference of raw waste aluminum will be maintained at more than 1200 yuan / ton, and recycled aluminum enterprises will continue to consume raw aluminum this month.
(SMM Yi Liang)
