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Aluminum market is still weak
The aluminum market is still in the weak market. The price of aluminum is mainly due to the recent decline in the news of the alumina reduction. As a result, spot aluminum prices have been falling slowly within a week. Compared with last week, the decline has slowed. Last Friday's spot price was 15070, which was 15,000 on Monday, 15,000 on Tuesday, 14980 on Wednesday, and 14960 on Thursday. From the spot trading situation in the past week, despite the fact that spot prices hit a new low during the year, there has been no active buying intervention. Aluminum consumers are still watching and waiting, and prices have not shown signs of stabilizing. Looking ahead to the market outlook, the pattern of the aluminum market is still weak. 1. Pressure on alumina price reduction is not light Recently, the stock of alumina at the port is relatively high, and prices have fallen. Last week, the price has dropped to 3,600 yuan per ton, while the domestic aluminum alumina price of Chinalco is still at 4,300 yuan per ton. With great downward pressure, the market expects Chinalco to cut its alumina prices very much. The decline in alumina prices will inevitably lead to a downward shift in the cost of aluminum ingots. There are pessimistic arguments that alumina prices are expected to reach 3,000 yuan/ton during the year, so Shanghai aluminum prices are inevitable. In addition, the traditional buy-and-buy mentality has led some manufacturers to adopt a wait-and-see attitude or use-to-buy strategy, making the trend of alumina not optimistic. 2. The National Development and Reform Commission emphasizes that the control measures for electrolytic aluminum will remain unchanged due to unprecedented power shortages this year. Electrolytic aluminum is an industry that consumes high power resources. Therefore, it is tightly controlled by the current state policies. The argument for controlling the development of the electrolytic aluminum industry has always been Not changed. Recent national tax officials’ speeches have made it almost a reality that rumors will cancel the 8% export subsidy for exporting aluminum ingots. Another bad news is that the country will impose an export tax of 5% on export aluminum ingots, and therefore strict controls on the aluminum industry. The measures have not changed. 3. Changes in the position structure made aluminum ingot fluctuations gradually slow down the transaction of aluminum ingots. Traditional aluminum and aluminum ingot consumers were the main players. The volatility was small. During this year, domestic futures experienced a large-scale hot money attack, and the trading volume was empty. The stocks have been reduced simultaneously, and the market has returned to the situation of buying hedge against selling, so the cost reduction, changes in consumption, and increase or decrease in production volume will dominate the future changes in the price of aluminum ingots rather than the original funds. Promoting, aluminum price volatility will tend to be flat. In other words, rising prices are difficult and require the promotion of funds, while Shanghai Aluminum’s weak short-selling volume has restricted the involvement of large funds. 4. The phenomenon of spot high inventory has not eased the pressure brought about by the increase in Shanghai aluminum stocks is obvious to all. At present, Shanghai aluminum stocks have exceeded 150,000 tons, and domestic dominant stocks and hidden stocks are expected to reach as much as 400,000 tons. High stocks will inevitably bring pressure on aluminum prices. However, after the spot price fell to 15,000, the market did not see any buying activity, indicating that there was no sign of any improvement in spot demand, and the large premium for the futures price of long-term futures will only lead to more preservative selling. Therefore, the increase in inventory within a short period of time is predictable. In addition, due to the current severe restrictions on the use of electricity in the country's peak period, frequent restrictions on the production of electricity will make aluminum production into a stagnant state, so the huge inventory will only lead to constant price bottom. Only after the electrolytic aluminum industry substantially reduces its production, high inventory will be eased. Judging from the newer data released so far, China’s output of aluminum ingots was 51.8 million tons in June, an increase of 18.6% from the same period of last year but a decrease of 29,000 tons from May, and the decline in output was not obvious. . Taking all these factors into consideration, there has been no improvement in consumption, production has not dropped significantly, and the expected decline in alumina prices has increased. Therefore, aluminum prices have not shown any signs of bottoming out. Instead, they are still on the decline. From the technical graph of Shanghai Aluminum, the main contract formed a downward breakout trend after falling below the lower limit of the previous trading range of 15,500 in October. The moving averages gradually formed a short order, firmly suppressing the rebound of the price, of course, due to the small volume of transactions. The probability of a sharp drop is not significant. The situation is mainly in the form of an overcast, the downward space is still there, and the weak market pattern remains unchanged. Investors should not easily buy the bottom. (Li Qiong)