In the short term, aluminum prices rebounded and came under pressure again

Introduction: The Federal Reserve rate hike landed in July, basically in line with market expectations, and the US dollar index continued to fall. Overseas Lun aluminum first showed a rebound trend, domestic Shanghai aluminum driven by the rebound, but in the context of off-season demand, aluminum ingot inventory began to accumulate, and aluminum prices rebounded again under pressure.

01. From a macro point of view, the pressure has eased and the price has rebounded

At the end of July 2022, the Federal Reserve raised interest rates by 75 basis points, and the dollar index continued to fall. Overseas Lun aluminum first showed a rebound trend, and domestic Shanghai aluminum was driven by the rebound. However, in the context of off-season demand, domestic aluminum prices rebounded and came under pressure again. Shanghai aluminum has rebounded to a certain extent under the support of the cost line in the early stage, and with the accumulation of aluminum ingot social inventory, aluminum prices have shown a rebound and fall.

02. From a fundamental perspective,As of August 01, the domestic electrolytic aluminum social inventory of 683,000 tons, 13,000 tons again appeared, downstream demand orders continued to weaken. On the supply side, the pressure on the supply side still existed in July, and the new production capacity and resumed production capacity in Guangxi, Yunnan and other places in China were steadily promoted.

03. Demand side,Aluminum downstream processing leading enterprises operating rate maintained at 66.3%, the off-season aluminum processing plate orders are relatively light, aluminum cable and aluminum profile plate operating rate continued to decline, which profiles by consumption off-season, epidemic and high temperature and other factors drag, the overall order increase is insufficient; Aluminum strip, aluminum foil and primary alloy plate start stabilized, downstream demand is still insufficient. On the whole, the current downstream consumption off-season, aluminum ingot library is expected to gradually strengthen, and aluminum prices are expected to be weak.

04. The characteristics of the off-season are obvious, and aluminum ingots are gradually built

July-august belongs to the traditional off-season of aluminum consumption, and downstream enterprise orders are generally insufficient. At present, the operating rate of leading enterprises in downstream aluminum processing is maintained at 66.3%, the orders of aluminum processing plate are relatively light in the off-season, and the operating rate of aluminum cable and aluminum profile plate continues to decline, among which the profiles are weighed down by factors such as off-season consumption, epidemic and high temperature, and the order increase is insufficient; Aluminum strip, aluminum foil and primary alloy plate construction is basically stable, downstream demand is still insufficient, and small and medium-sized aluminum processing enterprises are in a state of production reduction. Downstream demand orders continue to weaken, and aluminum ingot inventories have begun to accumulate. As of August 1, China's domestic electrolytic aluminum social inventory of 683,000 tons, 13,000 tons of inventory; LME aluminum inventory of 295,300 tons, continued to be destocked; The aluminum warehouse inventory of 62,200 tons in the previous period continued to be removed.

Looking forward to the future market, domestic electrolytic aluminum production capacity in August is still continuing to release, under the background of downstream aluminum consumption off-season, aluminum ingot social inventory is facing gradual accumulation of pressure. Aluminum prices are expected to come under pressure again, and the weak section is mainly operated under the off-season.