Analysis of aluminum price trend in the domestic spot market in February

Macro: On the domestic side, this month coincided with the Chinese New Year holiday, and the market opened the holiday mode early, making trading light
.
At the beginning of the month, bears continue to pressure, aluminum price weakness continues, the first trading day after the holiday, the market arrival increased, and the external decline dragged down, domestic aluminum prices fell sharply, and then rebounded, obviously there is still strong support, and after a long period of decline in the market, short-term does not rule out a rebound demand, but inventories continue to increase, may inhibit the price increase, and March 15 is the end of the heating season production limit, pay attention to market policy dynamics
。 In terms of foreign countries, this month Lun aluminum first fell and then rose and then fell, at the beginning of the month due to the continuous decline of U.
S.
stocks dragged down, the external aluminum price inertia down, intraday fell below the $2200 mark support, and then the price bottomed out, back to the $2200 mark, but this month coincides with the Chinese Spring Festival holiday, during the Spring Festival, the market waited for the United States heavy data to follow, the dollar rebounded and Lun aluminum inventories continued to rise, the external trend was slightly weak, and fell again at the end of the month
.

Market: Due to the Spring Festival holiday, downstream demand has weakened, limiting trading in February, and some downstream enterprises have not resumed construction, and market transactions are limited
.
East China: In February, due to the Spring Festival holiday, the market lacked favorable stimulation, aluminum ingot inventories continued to increase, aluminum prices fell into a low shock, Yangtze River spot aluminum fell below the 14,000 mark, the lowest down to around 13,690 yuan / ton, and then recovered part of the decline, as of the end of the month, Yangtze River spot aluminum between 14010-14050 yuan / ton
.
South China: After the Spring Festival, the downstream resumption of work in South China is not as good as that in East China, and there are more starts after the Lantern Festival, demand is weakening, aluminum ingot inventory has increased significantly, market demand recovery is slow, and transactions are limited
.
As of the end of the month, the price of aluminum ingots in South China was between 14340-14440 yuan / ton, down 110 yuan / ton
from the end of January.

In terms of inventory: this month, Lun aluminum inventory ended the downward trend in the early stage, as of February 28, Lun aluminum inventory 1324475 tons, a new high in nearly six months, an increase of 243,000 tons compared with January; LME aluminum stocks rose by 150,000 tonnes
in a single day on February 13.
This inventory change is concentrated in Malaysia and Singapore, where only a small portion of inventory is picked up for local downstream processing, mainly destined for the United States
.
And the increase in inventory also makes the trend of Lun aluminum slightly weaker
.
As of February 26, the weekly inventory of the Shanghai Exchange reached 810,000 tons, an increase of 16,521 tons
from January.
Because it coincided with the Chinese New Year holiday, the market was closed one after another, resulting in a gradual weakening of market transactions and a backlog of inventory
.
Market inventory, as of March 1, Shanghai area 417,000 tons, Wuxi area 885,000 tons, Hangzhou area 159,000 tons, Nanhai area 347,000 tons, Gongyi area 199,000 tons, Chongqing 28,000 tons, Tianjin 59,000 tons, seven mainstream consumption places aluminum ingot inventory 2.
094 million tons, another record high
.

Future market forecast: February coincides with the domestic Spring Festival holiday, market demand has weakened, and inventory pressure have all weighed on aluminum prices, and aluminum prices are slightly weak
.
At present, the market lacks substantial good news support, the trend of aluminum prices is not clear, but with the environmental protection supervision again, downstream enterprises return to the market to start work, market demand gradually warmed up, providing support
for aluminum prices.
Driven by factors such as limited supply-side growth and good performance on the consumption side, it is expected that short-term aluminum prices still have further room to rise, but the upside is limited
by the high domestic inventory.