1. Aluminum ingot price

According to SunSirs data, on December 30, the average price of domestic aluminum ingots in the East China market was RMB 15,786.67/ton, which was a decrease of 7.12% from the average market price of RMB 16,996.67/ton at the beginning of the month (December 1);  14,553.33 yuan/ton, an increase of 8.47%; compared with the average market price during the year (March 24) 11230 yuan/ton, an increase of 40.49%.

2. Fundamentals at a glance

Aluminum ingot destocking is still significant in December

According to statistics, as of December 24, the total domestic electrolytic aluminum social inventory was 58.6 tons, a decrease of 3 million tons from last week, and a decrease of 29,000 tons compared with 615,000 tons on November 19, which was a decrease of 29,000 tons compared with the domestic electrolytic aluminum society on October 16. The stock is 719,000 tons, and the warehouse is 133,000 tons.

Aluminum ingot imports increase

According to data released by the General Administration of Customs, China imported 188,973 tons of unwrought aluminum and aluminum products in November, a decrease of 26.4% from October and an increase of 158.6% from the same period last year.

In addition, it is estimated that the import volume of electrolytic aluminum in December will exceed 100,000 tons, and the import volume in January may also exceed 80,000 tons. The volume of overseas import contracts in December may gradually flow into China in January and February.

The exact data that has been learned shows that the imports of unwrought aluminum and aluminum products in the first November of 2020 are 2.44 million tons, a four-fold increase over the same period last year. In 2020, China's annual imports of aluminum have reached a record high.

Policy news

On December 21, 2020, the European Commission issued an announcement stating that it will conduct an anti-circumvention investigation on aluminum foil in rolls originating in China. The European Commission pointed out in the notice of filing that the Commission has sufficient evidence to prove that the products involved in the case originated in China were re-exported through Thailand (whether or not marked as originating in Thailand) to circumvent the current anti-dumping measures against Chinese roll aluminum foil. The EU CN codes of the products involved are ex7607 11 11 and ex 7607 19 10 (TARIC codes are 7607111111 and 7607191011).

3. Basic view of the market outlook

At present, domestic aluminum ingot consumption is good, social inventories continue to decline, and supply and demand factors support the strong operation of aluminum prices. With the upside down of the internal and external disks, the volume of imported aluminum ingots increases, and the increase is flattened to a certain extent. Near the end of the year, funds outside the industry are gradually withdrawn. Superimposed downstream consumption is expected to weaken on the eve of the Spring Festival, and the domestic aluminum price game between long and short is intensified. Based on the rough estimate of the current gross profit of electrolytic aluminum plants at 3000-5000 yuan/ton, there is a large volatility and operation space. The market outlook is mainly cautious. However, the situation of low inventory will be strongly supported at the bottom of the price, and the probability of a sideways trading is greater in the near future.

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