SMM News: in September 2020, the climate index of China's aluminum smelting industry was 38.2, up 3.6 points from the previous month; the leading composite index was 94.2, up 9 points from the previous month. The prosperity index of China's aluminum smelting industry in the past 13 months is shown in Table 1. The monitoring results of the model show that in September, the industrial climate index continued to rise upward from the lower edge of the "normal" range, coupled with the continuous rise of the leading composite index, the industry boom showed an upward trend. However, taking into account the domestic aluminum smelting product supply pressure, coupled with the increasingly severe aluminum export situation, the industry boom continues to improve the foundation is not stable.
Table 1 Prosperity Index of China's Aluminum smelting Industry in recent 13 months
A prosperity index continues to rise from the lower edge of the normal range.
In September 2020, the climate index of China's aluminum smelting industry rose 3.6 points from the previous month to 38.2, the second consecutive month in the "normal" range. The monthly prosperity index of China's aluminum smelting industry is shown in figure 1.
Fig. 1 trend chart of prosperity index of aluminum smelting industry in China
It can be seen from the prosperity signal light of China's aluminum smelting industry (see Table 2) that in September 2020, among the 10 indicators that make up the industry climate index, alumina output and total aluminum exports are in a "cold" range; LME aluminum settlement price, M2, total investment in aluminum smelting, commercial housing sales area, power generation, main business income, total profit, electrolytic aluminum output and other 8 indicators are in the "normal" range.
Table 2 Prosperity signal light of China aluminum smelting industry
The second leading composite index continues to rise.
In September 2020, the leading composite index of China's aluminum smelting industry was 94.2, up 9 points from the previous month and maintaining an upward trend. The composite index curve of China's aluminum smelting industry is shown in figure 2.
Fig. 2 Composite index curve of China's aluminum smelting industry
After quarterly adjustment, the five indicators that make up the leading composite index all increased month-on-month, including LME aluminum settlement price, M2, total investment in aluminum smelting, sales area of commercial housing and electricity generation increased by 5.9%, 0.4%, 5.4%, 2.6% and 1.5%, respectively. Year-on-year 4 rise and 1 drop, of which M2, total investment in aluminum smelting, commercial housing sales area and electricity generation increased by 10.6%, 64.4%, 10.8% and 8.3% respectively, and the LME aluminum settlement price decreased by 2.3%.
Operation characteristics and situation Analysis of the three Industries
In September 2020, the operating characteristics of the domestic aluminum smelting industry are as follows:
(1) the supply of aluminum smelting products continues to increase
1. The operating capacity is increasing.
In September 2020, the scale of electrolytic aluminum production capacity increased in Yunnan, Sichuan, Shanxi, Inner Mongolia and other places. As a result, the demand for alumina has increased, and production capacity has been reduced in Shanxi, Chongqing and other places to resume production one after another. By the end of September, the national operating capacity of alumina and electrolytic aluminum had increased to more than 71.6 million tons / year and 38.2 million tons / year respectively. In September, the national monthly output of alumina and electrolytic aluminum was 6.56 million tons and 3.163 million tons respectively, an increase of 13.9 percent and 8.0 percent respectively over the same period last year. It is expected that the output of alumina and electrolytic aluminum will continue to increase in the future. The changes of monthly average daily output of electrolytic aluminum and alumina in China are shown in figures 3 and 4.
Fig. 3 change of monthly average daily output of alumina in China
Fig. 4 change of monthly average daily output of electrolytic aluminum in China
two。 The import of electrolytic aluminum further increased, while the import of alumina dropped somewhat.
In September 2020, the average price of the three-month main contract of LME was 1783 US dollars / ton, up 0.6% from the previous month. The average price of the three-month main contract was 14066 yuan / ton, down 3.2% from the previous month. The three-month contract ratio of Shanghai Aluminum and Lun Aluminum has dropped compared with the previous month, but still remains between 8.0 and 8.3. In August 2020, China's electrolytic aluminum import reached a recent high of 250000 tons. At the same time, China's alumina imports are affected by the rise in foreign alumina prices, and the monthly import volume has dropped somewhat. Import 260000 tons in August 2020. The monthly import volume of alumina and electrolytic aluminum in China is shown in figure 5.
Fig. 5 changes of monthly imports of alumina and electrolytic aluminum in China
(2) the overall performance of aluminum demand is better than expected.
1. The main domestic aluminum consumption market continues to pick up, and the output of aluminum products has increased.
In September 2020, the key areas of aluminum consumption, such as construction, transportation, electronics and so on, showed a trend of improvement. In September, investment in real estate development nationwide totaled 1.5 trillion yuan, up 12 percent from the same period last year, and has achieved positive growth for seven consecutive months; real estate sales area of 190 million square meters, an increase of 7.3 percent over the same period last year, has been on the rise for five consecutive months. In September, car production and sales reached 2.524 million and 2.565 million respectively, up 14.1 per cent and 12.8 per cent respectively over the same period last year. As of September, automobile production and sales have achieved growth for six consecutive months, of which sales have maintained a growth rate of more than 10 percent for five consecutive months. In the first eight months of 2020, the national Electroweb project completed an investment of 237.9 billion yuan, an increase of 0.04% over the same period last year. In August 2020, the national monthly output of aluminum products was 4.86 million tons, with an average daily output of 157000 tons, which was basically the same as that in July 2020 and an increase of 13.8 percent over the same period last year. The change of monthly average daily output of aluminum in China is shown in figure 6.
Fig. 6 change of monthly average daily output of aluminum in China
two。 The export of aluminum products has rebounded, but the foreign trade environment is becoming more and more severe.
In August 2020, China's aluminum exports were 380000 tons, down 10.2% from a year earlier, up 3.7% from a month earlier, the third month since June, and down 21.6% from a peak of 480000 tons in March this year. The change of monthly export volume of Chinese aluminum is shown in figure 6.
Fig. 7 change of monthly export volume of Chinese aluminum products
In addition to the sudden periodic factors such as the overseas epidemic, the negative effects of the increasing trade frictions on the foreign trade situation of China's aluminum products are more huge and complex. Up to now, Chinese aluminum products have encountered more than 70 cases of trade friction, and with the outbreak of the COVID-19 epidemic, the momentum of international trade protectionism has intensified continuously. since the beginning of this year alone, the European Union, India, Egypt, the Gulf, the Eurasian Economic Union, Taiwan, Brazil, Thailand and other countries and regions have successively initiated 10 original investigations of anti-dumping and safeguard measures against aluminum plate, strip and foil, bar profiles, aluminum wire, aluminum ingots and other products. The export situation is getting more and more serious. The trade relief cases encountered by China's aluminum industry since the epidemic are shown in Table 3.
Table 3 Trade relief cases encountered by China's aluminum industry since the epidemic
Taking into account the changes in domestic and foreign demand, by the end of September 2020, the inventory of aluminum society has dropped from about 750000 tons at the end of August to about 700000 tons, returning to the level at the end of July.
(3) the industry as a whole remains profitable
In August 2020, the aluminum smelting industry (including alumina, electrolytic aluminum and recycled aluminum) made a profit as a whole. The total profit after quarterly adjustment was 2.75 billion yuan, an increase of 125% over the same period last year and 12.2% from the previous year. The profit margin of sales was 4.8%, 2.8% higher than the same period last year and 0.4% higher than the previous year. From the perspective of sub-industries, the profit level of the electrolytic aluminum industry is obviously better than that of the alumina industry, and the corporate profit level is still considerable, which is also the main driving force to promote the rapid launch of electrolytic aluminum production capacity. The financial situation of the aluminum industry in the first eight months of 2020 is shown in Table 4.
Table 4 Financial status of aluminum industry in the first 8 months of 2020 (unit: 100 million yuan,%)
To sum up, the supply and demand of China's aluminum smelting industry increased on both sides of supply and demand in September 2020, and the overall performance of the industry was good. However, for a period of time in the future, high aluminum prices will support the accelerated release of electrolytic aluminum production capacity and the monthly increase of output, and the adjustment of aluminum price comparison at home and abroad will ease the pressure of electrolytic aluminum imports on domestic supply. at the same time, it is also conducive to the export of aluminum products, but trade frictions continue to intensify, which brings great uncertainty to the export of aluminum products. With the warming of domestic consumption environment, the supporting effect of internal circulation on aluminum consumption becomes more and more prominent. It is initially expected that the aluminum smelting industry will fluctuate at the lower edge of the "normal" range for some time to come.
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