From a long-term perspective, it is a fact that Chinese aluminum ingots have excess capacity in the second half of the year. According to the statistics of the National Development and Reform Commission, the newly built idle capacity is 2 million tons. With the continuous production of idle capacity, the supply of primary aluminum will gradually increase in the second half of the year. In the first half of the year, the national output of electrolytic aluminum increased by only 18.1% year-on-year, while the national alumina production reached 5.95 million tons, an increase of 50.6% year-on-year. With the reduction of alumina prices, it will further stimulate the production of aluminum ingots. With the current market spending power, it is difficult to digest the continued increase in production capacity. At the same time, too rapid production capacity will bring severe pressure on China's limited copper resources, bauxite resources and power resources. The analysis of the economic performance of the aluminum industry announced in the first half of the year by the National Development and Reform Commission once again reiterated the view that the excessively rapid growth of production capacity in the aluminum smelting industry must be effectively controlled. This also shows that the country's macro-control of aluminum prices will gradually begin. With the passage of time, the power of reducing export tax rebates will gradually emerge, and the reduction of aluminum exports will directly affect the domestic demand for aluminum ingots. With the gradual increase in the supply of aluminum ingots and weaker demand, the short-term supply of aluminum ingots is unlikely to last long.
As China is a large aluminum producer, it has a large-scale hedging order. However, China, as a global aluminum producer, does not have pricing power. Therefore, aluminum prices do not have the initiative to increase significantly, and each sharp rise in aluminum prices will trigger a corresponding hedging position.
Looking back at the trend of aluminum prices this year, it can be seen that as the price of alumina falls, the high point of aluminum price increase in each round also gradually decreases. The current price of alumina is 2950 yuan/ton. According to the cost comparison, the aluminum price is more than 20,000 yuan, which is equivalent to the previous high point. The price increase on this basis will inevitably lead to a large number of aluminum plants. Hedge selling. Therefore, from the main contract 0612 point of view, between 20,000-21,000 yuan is a head area, while the cost of alumina is declining, the center of gravity of aluminum prices will be gradually reduced.
From the capital point of view, as the price of alumina has been lowered again and the price of aluminum has risen in the opposite direction, the positions of both long and short positions have gradually changed. It is clear that the main funds are not optimistic about the long-term trend of aluminum prices. At present, the main contract 0612 main force total empty 32,000, and the main long position is only 24,000. From the perspective of the position structure, the main short sellers are the Great Wall Weiye and Qingtongxia respectively holding 7,300 and 5,400 positions. In contrast, the main long positions are average and relatively scattered. The top three main long positions add up to only 7,000. Since there is not a large-scale hedge purchase from a mainstay, it is difficult for the long main fund size to compete with the main short position. The contest between long and short sides is like the battle between the dealer and the retailer. Unless there is a large number of long funds entering the market, the long positions of the main long positions will expand, or as long as the main short positions do not lighten up, the upward pressure on aluminum prices is very large. If the current price continues to rise, due to the divergence of fundamentals, it will not only trigger more hedges, but also generate more profits. However, if the price drops, the panic will inevitably lead to a trailing stop-loss. The lack of support from the main aluminum bulls will certainly accelerate the decline.
There will be short-term divergence in the formation of any major trend, and the appearance of deviation is often the beginning of a turnaround. At present, the rise in aluminum prices is only a short-term behavior. The inverse basis of aluminum prices has also shown that the market is bearish on aluminum prices. In the short-term supply and demand relationship of aluminum ingots, the coming three-month buffer period for export tax rebates will gradually change with the end of long vacation. In the long run, the oversupply and cost reduction caused by overcapacity are destined to decline in aluminum prices in the future. From this point of view, each relatively high point of aluminum price rise in the short term is our short-selling opportunity.
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