Analysis of aluminum price trend in Yangtze River spot market (2.20-2.24)

Macro: Abroad, the U.
S.
economy remained strong, CPI hit its highest level in nearly four years, and retail sales, housing and labor markets all performed better than expected
.
A number of Fed officials signaled a rate hike, and the probability of a rate hike in March has now risen to more than 40%, and the dollar has performed strongly this week, and base metals have fallen
under pressure.
Domestically, China's property market cooled in January, with the number of cities rising in house prices hitting the lowest level in a year, and mortgage growth indicators slowing
.
The relevant departments of China's Ministry of Housing and Urban-Rural Development are carrying out real estate tax legislation aimed at curbing the real estate bubble, and the cooling of the real estate market has rekindled market demand worries, triggering profit taking of funds, and domestic Shanghai aluminum has fallen
sharply.

Market: Futures plunged this week and narrowed
discounts.
This week's aluminum prices overall first rose and then declined, the price once rose to the level above 13900 yuan / ton, buyers on Friday morning bargain price acceptance slightly improved, spot in the afternoon with the futures rebound, holders became reluctant to sell, so that the premium further raised, downstream goods slightly increased
.
In the first half of the week, with the rebound of aluminum prices, market shipments began to increase, but downstream users generally waited and watched, believing that aluminum prices still had room to fall, and the stock was only based on rigid demand, and the trading was poor; In the second half of the week, as the price fell all the way, the downstream took a slight increase at the low level, and after the price rebounded, the holders were reluctant to sell, and the market transaction showed slight signs of
improvement.

In terms of inventory: the inventory of London aluminum is generally declining, the latest inventory is reported 2181675 metric tons, and the total inventory decreased by 20,675 metric tons this week, a decrease of about 0.
9%; The total aluminum stock on the Shanghai Futures Exchange this week was 193552 tons, an increase of 4,334 tons, or about 2.
3%,
from last week.
From the latest released inventory, as of February 23, the total social aluminum inventory in the five places in the country was 953,000 tons, an increase of 75,000 tons from last Thursday, and the total inventory approached the 1 million ton mark
.
Under high inventory, the spot discount continues to be discounted at 200 yuan / ton, due to the limited improvement of downstream consumption, the entire downstream bargain procurement is difficult to hold up the price of aluminum
.
Therefore, on the whole, the increase in inventory may put some pressure on aluminum prices, so although aluminum prices may rebound next week, they should not be high
.

Aftermarket analysis: As of the last trading day of the week, the inventory of the five places of the aluminum market reached more than 950,000 tons, the market inventory returned to the upward trend, the supply pressure was high, at the same time, China's Ministry of Housing and Urban-Rural Development hinted that it would take measures to stabilize the real estate market so that demand was difficult to obtain more than expected performance, and foreign countries faced the Fed's interest rate hike in March, the US infrastructure plan was postponed, and the overall environment was short in the near future, and the aluminum price with weak fundamentals fell
sharply.
It is expected that the aluminum market will be dominated by recent shocks
.