Zhitong Financial APP learned that Oriental Securities released a research report saying that in terms of power demand in Yunnan, industrial electricity consumption in Yunnan increased significantly in August, electricity transmission from January to July was not planned, or it was retained until August-December, with marginal improvement in inventory cycles between China and the United States, electricity demand in the fourth quarter increased significantly compared with the same period last year and compared with the same period last year. Considering that there are still electricity challenges in the industrial sector of Yunnan Province in the fourth quarter, and the risk that the remaining output of electrolytic aluminum may release lower than expected, it is recommended to pay attention to Aluminum Corporation Of China Ltd (601600.SH), Tianshan Aluminum (002532.SZ), Shenhuo (000933.SZ), Yunnan Aluminum (000807.SZ), and China Hongqiao (01378) of H shares.
The main points of Oriental Securities are as follows:
The abundant water in the 23-year rainy season has driven the monthly output of electrolytic aluminum to a new high in recent years in August.
In August 2023, the domestic output of electrolytic aluminum was 3.611 million tons, an increase of 1.3% over the same period last year. In August, the average daily output of electrolytic aluminum increased by 1536 tons from the previous month to about 116500 tons, and the operating rate of national electrolytic aluminum enterprises was about 96.05%. The total production capacity of domestic electrolytic aluminum operation is expected to increase slightly to around 42.9 million tons by the end of September. Among them, the increment mainly comes from the southwest region, and there is relatively abundant water this summer. By the end of August, all the planned production capacity in Yunnan has been released, and the operating capacity in Yunnan has been restored to around 5.55 million tons, an increase of 2.03 million tons over June.
Yunnan power supply in the fourth quarter of hydroelectric power or year-on-year repair, wind and thermal power into hydropower effective supplement.
Due to the shortage of water in Yunnan in the past two years, the total amount of hydroelectric power decreased year by year in the fourth quarter of 20-22, to 923,887,880 kilowatt hours respectively. With sufficient precipitation this year, the water level of various reservoirs in Yunnan has gradually recovered from the third quarter, and the restoration of water level has laid the foundation for hydropower in the fourth quarter, which is expected to exceed the same level of last year, or keep up with the level of 2021. In addition to hydroelectric power, the Fengguang water and fire storage project has been accelerated, thermal power units have been fully opened, and the increment of Fengguang thermal power generation has reached 16.6 billion kWh in the first half of the year, slowing down the contradiction between supply and demand caused by the huge gap of 34.9 billion kWh in the first half of the year.
In terms of power demand, industrial electricity consumption in the province increased significantly in August, and the power transmission plan was not completed from January to July, or retained until August-December. With the marginal improvement in the inventory cycle between China and the United States, electricity demand increased significantly in the fourth quarter compared with the same period last year and compared with the same period last year.
In August 23, the monthly industrial electricity consumption reached 16.95 billion kilowatt-hours, a new high in the same period of nearly three years. If the industrial sector is to maintain a steady operation of production capacity, electricity consumption in the fourth quarter will increase by 6.845 billion kilowatt-hours compared with the same period last year. Outside the province, due to the lower-than-expected hydropower generation in the first half of the year, the completion of the west-to-east power transmission is poor, with a cumulative deviation of 10.66 billion kilowatt-hours from January to July, and the power demand pressure inside and outside the province may be at a high level in the fourth quarter of the province, which means that hydropower generation in the fourth quarter of 23 will obviously exceed the best level in the past five years.
Risk Tips:The precipitation in Yunnan, Guizhou and Sichuan is higher than expected in the dry season. The output of "power transmission from west to east" in Yunnan, Guizhou and Sichuan is lower than expected. Macroeconomic growth is not as fast as expected. It is assumed that the change of conditions affects the calculation results.