In January, the domestic aluminum price oscillated strongly, the price of aluminum oxide fell sharply, and the bad news of aluminum product export tax rebates decreased. The bad news failed to suppress the aluminum price to go down. During the period, the stock price dropped sharply. Futures: Consolidation of the external disk Shanghai aluminum is near strong and weak.
In the first week of October, LME base metals followed a sharp decline in energy prices. As international crude oil prices rebounded, LME aluminum also rebounded to the previous oscillation range. In the past week, the number of aluminum positions in the external trading period increased to more than 550,000 contracts, and stocks declined slightly. The outlook for the stock market may further increase.
Judging from the trend in the last month, the Shanghai aluminum market bulls are relatively dominant, and the price rises are easy to fall. The lower inventory levels and high spot premiums boost market sentiment. Another rumor that there are spot background funds has pushed the market higher. In the recent fall of Shanghai Aluminum, they have received good support below. In the near-delivery period in August and September, the bulls' main force was to use a very low inventory level to start a squeeze market and push aluminum prices up. Last week, the bulls wanted to re-force their positions, but they failed to work because of relatively loose market supply.
Smaller hedge pressures are also conducive to maintaining a high level of Shanghai aluminum oscillation. Although the profit space continues to expand, the aluminum plant's willingness to protect hedges has not increased recently. In the past two months, the domestic spot price has been firm, and the spot premium has remained stable at a relatively high level, reaching 700 yuan at a time. Therefore, compared with the hedging operation, the aluminum plant has a greater profit from spot sales; in addition, the Shanghai Aluminum Group has strong and far weaker conditions. The relative low level of the far-month contract also restricted the aluminum plant's willingness to hedge.
Spot market: good fundamentals, strong spot premium
In September, the government formally announced the reduction of export tax rebate rates for aluminum products because the reduction rate is only 2% and 4%, and it has a three-month buffer period. Before the official announcement, many downstream manufacturers have also learned through various channels and in advance. With effective response measures taken, downstream consumption has not been significantly affected.
In October, the domestic market was in the peak season of traditional consumption. Good consumption conditions helped aluminum prices to operate at high levels, and spot premiums continued to rise in the past two months. However, after prices have risen sharply, downstream consumption has also experienced a certain degree of decline. From the market situation, the recent aluminum price in the Shanghai market has hit 22,000 yuan/ton twice, but both have failed to effectively stabilize; due to factors such as the replacement of aluminum scrap, the price rose to 21,000 yuan/ton, Guangdong aluminum prices rose weakly. The phenomenon is more obvious.
On the supply side, domestic primary aluminum production maintained a steady growth. The profit margin of up to 5,000 yuan/ton caused investment booms for all parties. The news of aluminum production expansion and production increase continued. From the perspective of the last two months, the increase in domestic production is mainly due to the expansion of aluminum plants and the start-up of idle production capacity. The impact of new construction projects is still not obvious. According to available data, the probability of a substantial increase in domestic production in the last two months is not significant. The growth rate of primary aluminum production this month is expected to remain stable.
The export situation is a big variable. The increase in the export volume of primary aluminum and aluminum products in the previous quarter effectively relieved the pressure on domestic output growth. Therefore, the changes will have an important impact on the supply and demand balance of the domestic aluminum market in the fourth quarter. According to the data released by the customs, after the strong growth in August, the domestic export volume of primary aluminum and aluminum alloys in September was 109,000 tons, 12.2% lower than the 124,000 tons in August. It is understood that this month's top aluminum producers in China have completed their export plans for the current year. Exports will inevitably be affected in the future. According to the closing price on October 13th, the ratios of Shanghai Aluminum 0610 and 0612 contracts to LME March aluminum were 8.02 and 7.59, respectively, which did not realize the break-even of general export trade, and did not support the export of primary aluminum. Aluminum products, due to the lack of comprehensive statistical data, it can not be analyzed, but after the formal announcement of tax rebate reduction, the significance of downstream manufacturers to surprise exports no longer exists. Unless domestic and foreign ratios are further revised, it is more likely that the export volume of domestic primary aluminum and aluminum products will decline.
Alumina: downturn in place short-term downside is limited
On September 26, the mainstream quoted price of domestic alumina decreased by 22.4% to 2,950 yuan/ton, followed by other domestic alumina prices. In the second week of October, the main domestic alumina transaction range was 2700. -2950 yuan/ton. After the price falls back to the current price level, the profits of the alumina smelters have been greatly reduced, and the market outlook will begin to have a supportive effect on the price, and there is little chance of a substantial downward adjustment in the short-term.
Overview: Stable aluminum prices remain high
With the potential shortfall in the previous period, the domestic aluminum market has been dull for the past two weeks. In terms of fundamentals, this month is still the traditional peak season for consumption. Good fundamentals will help support aluminum prices to maintain high levels of oscillation, but pressure on the current sharp rise in prices again is more obvious, especially in the external disk aluminum has not yet exceeded the upper resistance in the case of. From the past week, with the increase of inventory, the spot premium has dropped significantly. Considering the possibility of the increase in inventories due to the delivery demand, it has not been possible to assert that domestic supply has increased significantly, and the uncertainty in the export volume has also increased. Affecting domestic supply, changes in the level of stocks in the future will have a significant impact on aluminum prices. The short-term domestic spot aluminum price is expected to continue to operate in the oscillation range in the past month. With the increase in inventory, the spot pressure will begin to appear, and the mid-to-long-term aluminum prices still have more room to fall.
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