Alumina & Aluminum Monthly

The Most Essential and Authoritative Source for Chinese Metals Market Alumina & Aluminum Monthly December 2018 No.264 1651z165165165 Hosted by: China Nonferrous Metals Industry Association INSIDE THIS ISSUE Published by: Beijing Antaike Information Co., Ltd. Highlight Chief Editors: XIONG Hui, YAO Xizhi China Henan International, Zhongwang and Yidian to jointly develop bauxite Executive Editor: HUANG Wei resource in Guinea……………………………………………………………...2 Research Team: CHEN Huan, HUO Yunbo, YUAN Yuan, Demand Balance SHEN Lingyan, CHAI Yuan China Primary Aluminum Supply/Demand Balance ………………….....…2 Sales Manager: LI Yuan Price Trend Tel: +86-10-6256 0921 Fax: +86-10-63971647 Aluminum price dropping on weak fundamentals………………………….3 Web site: http://www.antaike.com Import and Export Email: [email protected] Bauxite Imports and Price by Country in October 2018…………………….11 Address: 2nd floor, 12B Fuxing Road, Haidian District, Beijing, People's Republic of China News Post Code: 100814 Industrial Policy, International Trade, Cooperation SMB to invest USD3.0 billion in railway and alumina projects in Guinea…….17 Disclaimer: Bauxite & Alumina Whilst every effort has been made to prepare this report, Chongqing Bosai acquires Shandong Qixing Alumina Refinery……………….19 Beijing Antaike Information Co., Ltd. makes no warranty Aluminum of any kind in regard to the contents and does not accept Chinalco obtains 51% share of Yunnan Metallurgical Group………………….20 responsibility for any losses or damages arising directly, or indirectly, from the use of this report. Statistics of NBS, LME and SHFE Prices Output of key industries in China……………………………………………23 All Rights Reserved LME and SHFE Aluminum Price…………….………..………………………24 The contents of this report are for the sole use of the LME and SHFE Reported Aluminum Stocks……………………………..…..25 client and its employees and may not be transmitted in ATKASI, Imported Spot Alumina Arithmetic Average Price………..….25 any form whatsoever to third parties. Domestic Suppliers’ Quoted Prices of Aluminum Related Products…….26 ©2018 Beijing Antaike Information Co., Ltd. This issue was dispatched on November 30, 2018 (www.antaike.com) (www.metalchina.com) Alumina & Aluminum Monthly Highlight China Henan International, Zhongwang and Yidian to jointly develop bauxite resource in Guinea China Henan International Cooperation Corporation, China Zhongwang Holdings Limited and Yidian Holding Group Co., Ltd. on November 22 signed a framework cooperation agreement to jointly develop bauxite resource in Guinea. China Henan International Cooperation Corporation (CHICO) is a large-sized state-owned foreign economy & trade enterprise and owned by the government of Henan province. The company’s subsidiary Henan International Mining Co., Ltd. in October 2010 obtained the bauxite exploitation license at Boke of Guinea. The bauxite mining project has been operating smoothly and the project is expected to export 6.00 million tonnes of bauxite in 2018. Under the coordination and support of the government of Henan province, the three companies decide to increase investment in the project to complete the industrial chain including bauxite mining, alumina refining and aluminum smelting. Yidian Holding Group Co., Ltd. is large-scale enterprise comprising of power generation, aluminum smelting, aluminum fabrication, carbon production, utilization of fly ash and so on. It has capacity of 2220 MW thermal power installed, 840,000 tpy primary aluminum, 250,000 tpy Haziliete (casting and rolling) aluminum sheet, etc. Supply-Demand Balance China primary aluminum supply/demand balance in October 2018 (Unit: kt) 2018 June July August September October 2018 Output 36,670 3,082 3,192 3,141 3,047 3,146 Net import 60 3 3 3 3 5 Supply 36,730 3,085 3,195 3,144 3,047 3,146 Consumption 35,400 3,325 3,245 3,204 3,215 3,231 Market balance 1,330 -240 -50 -60 -165 -80 Sources: China Customs, Antaike China Alumina Supply/Demand Balance in October 2018 (Unit: kt) 2017 Jan 18 Feb Mar Apr May Jun Jul Aug Sep Oct 18 Output 70,400 5,780 5,190 5,850 5,960 6,210 6,070 6,140 6,130 6,020 6,161 Net import 2,810 70 100 10 80 -70 -70 -90 -20 -140 -80 Supply 73,210 5,860 5,290 5,860 6,040 6,140 6,000 6,040 6,110 5,890 6,080 Demand for metallurgical-grade 70,350 5,750 5,240 5,870 5,770 6,000 5,910 6,030 6,030 5,880 6,040 alumina Demand for chemical-grade 2,100 180 165 183 177 183 177 183 183 177 183 alumina Total demand 72,450 5,930 5,410 6,060 5,950 6,180 6,090 6,220 6,210 6,060 6,220 S/D balance 760 -70 -120 -190 90 -40 -90 -170 -100 -170 -140 Source: China Customs, Antaike 2 (www.antaike.com) (www.metalchina.com) Alumina & Aluminum Monthly Price Trend Aluminum price dropping on weak fundamentals SHFE aluminum price keeps dropping in November and it is expected that the weak fundamentals will continue to push down the price in the near term. Under the current market condition, most of domestic aluminum smelters suffer big loss. Some medium and small sized aluminum smelters have reduced output in recent months. This month, the large-scale ones in Qinghai province begin to slash output. The domestic demand will further decrease with the upcoming winter, the traditionally weak period for consumption of the light metal. The aluminum smelters will strive to reduce loss to pass winter. Globally, the transnational giants such as Foxconn, Ikea, Ford, Volkswagen, GM also shut down production lines in view of the dim economic picture. Candlestick Chart of SHFE 3-Months Aluminum Futures Contract Price, Trade Volume, Open Interest (yuan/t, tax included; 10k lots) Source: SHFE SHFE 3-months aluminum price will move in 13,500-14,100 yuan/t and LME 3-months aluminum in USD1,900-2,100/t in December, Antaike forecasts. (www.antaike.com) (www.metalchina.com) 3 Alumina & Aluminum Monthly SHFE, LME 3-Months Aluminum Futures Contract Price 18,000 2,600 2,500 17,000 2,400 2,300 16,000 2,200 15,000 2,100 2,000 USD/t 14,000 1,900 1,800 yuan/t (tax included) (tax yuan/t 13,000 1,700 1,600 12,000 1,500 11,000 1,400 SHFE 3-Months Al LME 3-Months Al Sources: LME, SHFE Premiums of Guangdong Nanhai, Shanghai Changjiang Spot Aluminum Price and SHFE Spot-Month VS SHFE 3-Month Aluminum Futures Contract Price (yuan/t, tax included) 200 14600 14400 100 14200 0 14000 -100 13800 -200 13600 Nanhai Changjiang SHFE spot-month SHFE 3-month Sources: SHFE, Antaike 4 (www.antaike.com) (www.metalchina.com) Alumina & Aluminum Monthly Price Ratio Of SHFE 3-Months Aluminum Futures Contract Price to LME 3-Months Aluminum, Middle Exchange Rate Of RMB against USD, Break-Even Point Of Importing Primary Aluminum from Foreign Country to China, Exporting Aluminum from China to Foreign Country 9 price ratio exchange rate 7 8.5 6.9 8 6.8 7.5 6.7 7 6.6 6.5 6.5 6 6.4 5.5 6.3 5 6.2 Actual Price Ratio Import Export RMB Middle Exchange Rate Sources: LME, SHFE, People’s Bank of China Note: just for reference for arbitrage between LME and SHFE aluminum futures contracts Domestic alumina price edges down ATKASI alumina price rebounded in early November because of production cut of some alumina refineries and strong support from production cost, but resumed downward trend in late of the month mostly due to falling aluminum price. Most of the aluminum smelters have lost money and thus expected lower alumina price to help reduce loss. Daily Spot Price of Non-Chalco Alumina and ATKASI (yuan/t, tax included) 3350 3300 3250 3200 3150 3100 3050 3000 Henan Shandong Shanxi Guangxi ATKASI Source: Antaike (www.antaike.com) (www.metalchina.com) 5 Alumina & Aluminum Monthly On November 30, the quoted prices of the domestic alumina producers are: Shandong, 3,070-3,130 yuan/t yuan/t, down by 40-50 yuan/t from that at the end of October; Henan, 3,050-3,130 yuan/t, down 20 yuan/t; Shanxi, 3,040-3,120 yuan/t, down 10-30 yuan/t; Guangxi, 3,050-3,110 yuan/t, down 10-30 yuan/t; Guizhou, 3,060-3,100 yuan/t, down 30 yuan/t; Inner Mongolia, 3,040-3,090 yuan/t, down 40-50 yuan/t from a month earlier. The average price (ATKASI) is 3,085 yuan/t on November 30, down from 3,113 yuan/t at the end of October. The average monthly ATKASI is 3,163 yuan/t in November, up from 3,111 yuan/t in October It is expected that domestic alumina price will still edge down in the near term. Average Monthly Spot Price of Imported Alumina, ATKASI and Long-Term Contract Price (yuan/t, tax included) 4,000 3,800 3,600 3,400 3,200 3,000 2,800 2,600 2,400 2,200 2,000 Imported ATKASI Long-Term Contract (17.3% SHFE 3M Al) Source: Antaike Domestic aluminum stocks The SHFE reported aluminum stocks stood at 750,229 tonnes on November 23, down from 814,042 tonnes at the end of October. The SHFE aluminum stocks have continued to decline in recent five months mainly due to strong export of the products. On the supply side, the growth of China’s primary aluminum output has come to an end owing to production cut of high-cost capacity in recent months. Thirdly, the aluminum stocks in Xinjiang expand and the shipment to the east region and other consuming reasons is delayed because of railway transportation problem.

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