Event: Recently, the price of electrolytic aluminum outside China has risen significantly. As of February 10, the closing price of SHFE aluminum rose to 22390 yuan / ton, with a monthly increase of 7.7%; On the 9th, the closing price of LME aluminum rose to US $3263 / ton, with a monthly increase of 8.5%, approaching an all-time high of US $3380 / ton.
Comments:
China: Baise epidemic affects the production capacity of 1.2 million tons / year of alumina and 420000 tons / year of electrolytic aluminum. Recently, there was covid-19 epidemic in Baise, Guangxi. As of February 10, 186 people had been diagnosed in Baise. According to the data of Antaike, at present, due to the epidemic, the output of Huayin Aluminum Industry in Debao county has been reduced by 1.2 million tons / year, and the production of 420000 tons / year electrolytic aluminum in Guangxi Geely baikuang electrolytic aluminum plant has been stopped. Baise is an important producer of alumina and electrolytic aluminum in China. According to the data of Antaike, by the end of 2021, the total alumina production capacity of Baise was 9.55 million tons / year (accounting for 10.5% of the country), and the electrolytic aluminum production capacity was 2.195 million tons / year (accounting for 5.2% of the country). If the epidemic situation in Baise continues to be tense, or continues to affect the production and transportation of alumina and electrolytic aluminum.
Abroad: the price of natural gas is high, and the production capacity in Europe is more than 800000 tons / year. Since the second half of 2021, the sharp rise in European natural gas prices has led to a surge in power costs, and many zinc and aluminum smelting enterprises have shut down some production capacity due to high power costs. According to SMM statistics, by the end of January 2022, the production capacity of electrolytic aluminum in Europe has exceeded 800000 tons / year, accounting for about 1% of the global electrolytic aluminum production capacity. If natural gas prices remain high, European aluminum enterprises may further reduce production. Meanwhile, the electrolytic aluminum production capacity of Russian aluminum enterprises exceeds 4 million tons / year, accounting for about 6% of the global electrolytic aluminum production capacity; If the conflict between Russia and Ukraine further escalates, it may lead to sanctions against Russia by European and American countries, or affect Russia’s aluminum supply.
Inventory: the accumulated inventory of Chinese Spring Festival was lower than expected, and the overseas inventory fell to an all-time low. As of February 10, the national spot inventory of electrolytic aluminum was 950000 tons, and 140000 tons were accumulated during the Spring Festival, which was significantly lower than the data of the same period in previous years. Overseas, LME aluminum inventory has fallen to 880000 tons, at an all-time low.
Profit: the average profit per ton of aluminum recovered to more than 3200 yuan / ton. According to the data of Baichuan Yingfu, due to the decline of energy and alumina prices in the early stage, the average gross profit of electrolytic aluminum industry had recovered to 3224 yuan / ton as of the week of January 29. After the accelerated rise of electrolytic aluminum prices in China this week, the profit space of aluminum enterprises will be further expanded.
Supply disturbance, continue to be optimistic about the upward price of electrolytic aluminum. In the short term, the shutdown of aluminum enterprises caused by high power costs in Europe and the disturbance of Baise epidemic in China will continue to affect the global electrolytic aluminum supply. In the long run, the red line of electrolytic aluminum production capacity in China will limit the long-term supply of the industry. In the context of low global inventory, the disturbance of supply outside China is intensified, which will continue to promote the upward price of electrolytic aluminum. Continue to recommend Henan Shenhuo Coal&Power Co.Ltd(000933) , Shandong Nanshan Aluminium Co.Ltd(600219) , and pay attention to Aluminum Corporation Of China Limited(601600) .
Risk warning: risk of electricity price policy adjustment; The high rise of aluminum price suppresses the risk of downstream demand; The growth of waste aluminum recycling exceeded expectations.
