[SMM analysis] Guangdong aluminum ingot: as long as I rise water fast enough, I can catch up with the price of aluminum bars

SMM4, 24th:

This week, Shanghai aluminum futures fell first and then rose, the main contract between 12000-12500 yuan / ton wide shock, Guangdong aluminum ingot spot is relatively stronger, Tuesday low at 12200 yuan / ton, Friday high price is more than 12700 yuan / ton. Guangdong aluminum ingot stocks were 273000 tonnes on Friday, down 51000 tonnes from Friday and 167000 tonnes, or 37.9 per cent, from their year-on-year high of 440000 tonnes on March 24. Inventories have fallen sharply, and the decline in circulating aluminum ingots has led to higher spot prices for Guangdong aluminum ingots, with aluminum base differentials rising sharply from 50 yuan per ton to 290 yuan per ton this week.

At present, Guangdong aluminum ingots are in the storage stage: on the supply side, the spot price of Guangdong and Shanghai in March has been hung upside down for a long time, which has reduced the volume of northern aluminum plants to Guangdong, in addition, the production capacity of southwest China has been slightly reduced, the local conversion rate of aluminum water has increased, and the amount of ingots cast and shipped has also declined. From April to now, the storage volume of Guangdong aluminum ingots is only more than 70, 000 tons, while that of Guangdong aluminum ingots in March is more than 260000 tons. On the demand side, the average output of Guangdong aluminum ingots reached 66000 tons in the first four weeks, up 57 percent from the same period last year, doubling from March. Orders, including small and medium-sized enterprises, have been in good condition since April. Because of the lack of waste aluminum, the remelting rod plant has also increased the purchase volume of aluminum ingots, and the current exuberant spot demand will continue at least until mid-May.

After the spot price of Guangdong aluminum ingots rose by 100 yuan today, the price gap between Guangdong and Shanghai has widened to 220-240 yuan / ton, which is far higher than the normal level of 80-110 yuan / ton (the freight difference from Xinjiang / Inner Mongolia to Foshan / Wuxi). At present, the shipping cost from Shanghai / Wuxi to Guangdong is about 110 yuan / ton, and the shipping date is 5-10 days. In the aspect of automobile transportation, if the cost of outsourcing motorcade is more than 300 yuan / ton, and if it has its own logistics, the cost ranges from 250 to 300 yuan / ton. In addition, the freight from Nanchang to Foshan is about 220 yuan / ton, and the freight from Baise to Foshan is about 150 yuan / ton.

As the processing fees for aluminum bars in Guangdong broke a thousand on Wednesday and Thursday, a large number of automobile aluminum bars from southwestern provinces were shipped to Guangdong today, and the processing fees fell sharply. The situation of aluminum ingots is similar, some traders have begun to ship goods from East China, lock the price ahead of time to delay delivery, or first digest some of the inventory and then use the subsequent arrival of East China to replenish the warehouse. Because the mismatch between supply and demand in a short period of time leads to the price spread beyond the reasonable range, under the rapid adjustment of market inventory, the room for Guangdong aluminum ingots to continue to rise is limited, and the price difference between Guangdong and Shanghai is also expected to narrow before the festival.