Aluminum prices stop falling and volatile market demand is weak and accumulation exceeds expectations

Rising fears of a global recession, tumbling energy prices, and rising concerns about aluminum oversupply led to a drop
in aluminum prices last week.
But the U.
S.
nonfarm payrolls report released late Friday showed a larger-than-expected slowdown in wage growth in December, with the ISM non-manufacturing index falling into contraction territory for the first time in more than two years in December, but the price payment index hitting a two-year low
.
The Fed's interest rate hike pressure eased, the dollar weakened, and the base metals turned higher
.

In terms of inventory, the unexpected increase in inventory due to the increase in large goods, SMM statistics on the 5th domestic main consumption of aluminum ingot inventory of 576,000 tons, an increase of 83,000 tons from last Thursday; in the same period, steel union statistics of domestic main consumption of aluminum rod inventory of 96,500 tons, an increase of 16,500 tons
from last Thursday.

In terms of imports and exports, in November 2022, China exported 455,500 tons of unwrought aluminum and aluminum products, down 24,000 tons from the previous month, and exported 6,131,900 tons from January to November, an increase of 21.
3%
year-on-year.
From January to October 2022, the export volume of unwrought aluminum and aluminum products was 5.
6762 million tons, an increase of 24.
9%
over the period from January to October last year.
In November, China imported 255,700 tons of unwrought aluminum and aluminum products, down 35.
7% year-on-year; From January to November, the cumulative import volume was 2.
1327 million tons, down 28.
2%
year-on-year.

In terms of production capacity, the recovery of production capacity was hindered, and Guizhou power rationing was upgraded
.
Guangxi guest Yinhai technical transformation resumed production of 250,000 tons, Inner Mongolia Baiyinhua aluminum power put into production; The second phase of the Gansu Sino-Swiss technological transformation project was put into operation; Guizhou Power Grid issued a notice on the implementation of load management for electrolytic aluminum enterprises, and electrolytic aluminum enterprises in the province are expected to reduce production by 30% by about 400,000 tons, and on the 29th, power cuts are reduced by 20% by about 200,000, and power cuts are reduced by about 300,000 tons
on the 5th.
Indonesia announced a ban on the export of bauxite in June 2023, and Indonesia's imported ore accounted for a relatively small proportion and the direct impact was limited
.
Nanshan Aluminum plans to sell 336,000 tons of electrolytic aluminum indicators
.

On the demand side, affected by the epidemic, downstream demand was weak, the holiday was advanced, and the amount of ingots cast by aluminum plants increased
.

Last week's aluminum price decline was mainly due to weak fundamental demand and the pressure of exceeding expected accumulation, but the late supply contraction formed a certain support for aluminum prices, and after approaching the cost line below, aluminum prices are expected to show a trend of stopping the decline
.
It is expected that the operating range of Shanghai aluminum is 17400-18600 yuan / ton, and it is recommended to stock up
on demand.