Analysis of aluminum price trend in Yangtze River spot market (10.31-11.4)

Macro: The sharp drop in crude oil this week and the uncertainty surrounding the US election have sharply heated up risk aversion in the market, and domestic aluminum prices have generally weakened
.
The surge in U.
S.
crude oil inventories and doubts about the ability of oil producers to coordinate production restrictions, oil prices fell for five consecutive trading days, and the uncertain outlook of the presidential election weighed on the stock market, U.
S.
stocks hit the longest consecutive decline in nearly eight years, investors' risk aversion rose sharply, and the market was affected
.
Driven by black and bullish atmosphere of copper and zinc, aluminum prices rebounded, but finally plunged sharply to a weekly low
on Friday afternoon.
On the whole, after the overdraft of the early benefit, aluminum began to fall, capital speculation made the short-term Shanghai aluminum shock intensified, it is expected that spot aluminum short-term is still weak and volatile.

Market: this week's arrival increased, and superimposed on the month-end factors, spot premium fell significantly from 580 yuan / ton on Friday, this week mainly runs between 330-350 yuan / ton, holders of shipments are active, middlemen are cautious and wait-and-see, and downstream is more difficult to accept high prices, and the receiving force is weak
.
Although the arrival of spot goods has increased, railway transportation in Xinjiang has not been solved, there is a large backlog of goods, and the increase in automobile transportation has slightly eased the tight situation of spot inventory, but the overall level is low and tight
.
At present, small-scale automobile transportation and a small amount of imports in Xinjiang have inhibited spot premiums, aluminum prices have also begun to fall comprehensively after overdraft in the early period, capital speculation has intensified short-term Shanghai aluminum shocks, and spot aluminum is expected to remain weak in the short term
.

Stocks: LME aluminium stocks were 2131075 tonnes as of Nov.
4, down 12,425 tonnes from last week, and were close to the low of 2068925 tonnes set on Dec.
18, 2008; In the same period, the aluminum inventory in the previous period reported 97,561 tons, a sharp increase of 11,847 tons, a four-week increase, but far lower than the average inventory value of 233,000 tons during the year, and close to the low point of 83,775 tons
in the year.
It is reported that the domestic social inventory of aluminum ingots on Thursday was 256,000 tons, although it has recovered month-on-month, but the absolute value is still at an extremely low level, while the spot premium remains high, and the entire supply structural shortage will give aluminum price support
.
In general, both ends of aluminum supply and demand have production capacity successively put into use, but the speed of new and resumed production of electrolytic aluminum production capacity is significantly faster than that of the demand side, and the pressure of long-term oversupply of electrolytic aluminum has increased, which has become a fundamental factor
for the sharp decline in aluminum prices this week.

Aftermarket analysis: last week's aluminum market up limit is extremely strong, this week domestic Shanghai aluminum experienced a drop limit, although after recovering a part of the decline, but the price still fell a lot compared with last week, the main reason is that the aluminum arrival increased significantly, the early bulls accumulated too many profits, the market appeared to sell cash, close the situation
.
Facing the final decision of the US election next week, market uncertainty has increased, the US dollar is likely to remain under pressure, base metals are mostly still in an upward channel, rushing upwards to find new highs, and the market is filled with bullish atmosphere
.