Aluminum prices may return to the downward trend, and the whole is treated with a bearish idea

In terms of terminal demand, the rapid recovery of automobile production and weak real estate investment have become the main factors affecting the current market, and the lack of real estate aluminum consumption is the main reason for
weak demand.
At present, on the one hand, the Fed raised interest rates by 75 basis points in July, and the subsequent statement was relatively vague, leaving room for future market operations; On the other hand, the significant decline in bauxite imports in June may become the starting point
for the decline in raw material costs.
Therefore, the Shanghai aluminum rally has come to an end, and the market will return to the downward channel
.

In terms of supply and demand, data show that the domestic electrolytic aluminum construction capacity in early July was 44.
434 million tons, the operating capacity reached 41.
293 million tons within the month, and the capacity utilization rate reached 92.
93%, and the high supply phenomenon is still continuing
.
In terms of demand, the output of aluminum rods, aluminum rods and aluminum plates and foils in June was 1.
2775 million tons, 260,400 tons, and 719,900 tons, respectively, from the perspective of intermediate products, the overall production decline of aluminum profiles is not obvious, only lower than the output in 2021, but considering the increase in new production capacity in the same period, the operating rate is lower than the same period
of previous years.
In terms of terminal products, domestic automobile production in June was 2.
499 million units, and the output of new energy vehicles was 590,000 tons, an increase of 26.
42% and 120.
80% year-on-year, respectively, both hitting new highs in the same period in history, supporting aluminum consumption
.
From January to June, the completion of domestic real estate investment and development was 6,831.
4 billion yuan, down 5.
4% year-on-year, and there was no turning point
.
Overall, the slow recovery of real estate has caused a gap in related aluminum consumption, which has become the primary reason
for weak demand.

In terms of costs, as of the low in July, the average domestic alumina summary price was 3033 yuan / ton, the price of Q5500 produced in Inner Mongolia was about 1200 yuan / ton, and the price of main raw materials was at a historical high, and there was no short-term downward trend
.
However, the import volume of bauxite in June was only 9.
4152 million tons, a decrease of 2.
5586 million tons from the previous month and a year-on-year decrease of 724,500 tons, and the reduction in demand will be the beginning
of the decline in raw materials.
In terms of excipients, the price of pre-baked anodes remained high, and the price of aluminum fluoride returned to the average value of previous years
.
According to estimates, the current complete production cost of electrolytic aluminum is around 17,000-17,500 yuan / ton, with the correction of Shanghai aluminum prices, the current electrolytic aluminum production profit fell back to 1,000 yuan / ton, and some high-cost areas suffered losses
.

Overseas, the Fed recently announced a 75 basis point interest rate hike, the federal funds rate was raised to 2.
25%-2.
5%, the interest rate level returned to the pre-epidemic level, and the subsequent Fed Chairman Powell expressed a relatively vague statement, but according to the mainstream forecast of the market, the interest rate will be raised to about 3% at the end of the year, so the logic of interest rate hikes on the overall industrial products is still there
.
In terms of overseas production capacity, electrolytic aluminum shutdown capacity is still increasing, and LME aluminum inventory has also continued to decrease, becoming a new variable
affecting the trend of aluminum prices in the later period.

In summary, the Fed's interest rate hike and weak terminal demand are still the main factors
affecting the market.
Looking ahead, the general rebound of commodities is facing an end, and aluminum prices will also return to the downtrend
.
In terms of cost, as the price of bauxite continues to fall, the space for aluminum prices to fall will be further opened, and the overall idea is appropriate
.