In the first quarter, electrolytic aluminum production decreased 3% to 745 tons; Among them, the output of electrolytic aluminum in March was about 2.48 million tons, which was the same as that in February. Alumina production in the first quarter was 13.52 million tons, down 3.2% year on year. Against the background of stable exchange rate in the first quarter, the rapid rise of the Shanghai RBI to a high of 7.8 in March indicates the tighter domestic supply and demand structure. Although aluminum prices rose by 9.2% in the first quarter, alumina rose by 17.6% in the first quarter, which largely offset the profit improvement of electrolytic aluminum enterprises caused by the price rebound.

The first half of the year electrolytic aluminum recovery pressure is small

In March, the national production capacity of electrolytic aluminum was 34 million tons, which was not affected by the reduction of production. In the first quarter, the annualized capacity utilization rate of electrolytic aluminum production was 87.6%. The production capacity of alumina is 60 million tons, and the annualized capacity utilization rate of alumina production in the first quarter is 90.1%. At present, the planned production capacity of electrolytic aluminum is only 690,000 tons, which is lower than the market expectation. We believe that there are three main reasons for the slow production of electrolytic aluminum: limited government support, banks' caution in lending to industries with excess capacity, and the lack of "safety margin" for the resumption of high-cost production capacity given by the current aluminum price. Considering that it will take 1 to 2 months for electrolytic aluminum to resume production, the newly put into production capacity will gradually reach production in the second half of the year, and it is expected that the increase of electrolytic aluminum production in the first half of the year will be very limited. As for alumina, it is believed that the price will fluctuate in the range of 1,900-2,200 yuan/ton due to the relatively balanced supply and demand, and it is difficult to appear the extreme level of 1600 yuan/ton last October.

Demand is good, the annual growth rate of Chinese demand is expected to reach 5.2%

Real estate investment in the first quarter has picked up significantly. The total amount of investment in real estate investment and development increased by 6.2% year on year in the first three months, showing signs of accelerating recovery in real estate investment activities. In the first quarter, the output of automobiles was 6.68 million, up 6.5% year on year, and the sales volume was 6.52 million, up 6.0% year on year, showing the pattern of booming supply and demand. From the actual downstream feedback, the demand for aluminum plate and aluminum foil for automobile and light rail transportation is relatively strong.

It is estimated that this year China's electrolytic aluminum demand growth rate is about 5.2%, electrolytic aluminum supply growth rate is about 4.3%, domestic supply and demand to maintain a weak balance.

Flow monitoring, the current supply and demand structure is tight

From January to February 2016, the total volume of domestic alumina and imported alumina was 9.91 million tons, up 7.5% year on year.

The output of electrolytic aluminum was 4.55 million tons, down 2.0% year on year, and the output of aluminum was 8.04 million tons, up 16.0% year on year.

It is believed that the rapid year-on-year growth of aluminum reflects the strong demand in the downstream of electrolytic aluminum, which will have a positive impact on the destocking of electrolytic aluminum. However, the price of electrolytic aluminum has not reached the "incentive price for resuming production", so the electrolytic aluminum can still maintain the rising trend in a short time.