Analysis of aluminum price trend in Yangtze River spot market (7.10-7.14)

Macro: Abroad, Federal Reserve Chair Yellen said that the Fed will only gradually tighten monetary policy, this statement curbed the Fed's speculation to raise interest rates again this year, the Fed's dovish speech frustrated the dollar index lower, aluminum prices benefited from a strong
trend.
Domestically, affected by the supply-side reform policy of the electrolytic aluminum industry, the production of electrolytic aluminum in Shandong and Xinjiang declined in June to ease the pressure of excess domestic inventory and support the rise
in aluminum prices.

Market: This week continues to be affected by off-season factors, the overall trading situation is general, and the downstream on-demand receiving is the mainstay
.
On Tuesday, the holders began to ship at high prices, and in the afternoon, the enthusiasm of middlemen and downstream receiving goods increased, but mainly delivery warehouse receipts, and on Wednesday, middlemen were once bullish after the market pressed down prices to receive a large number of goods
.
On Friday, aluminum prices jumped sharply to 14,200 yuan / ton, holders shipped positively, with the late afternoon aluminum prices lowered, have been larger than the average price of the Yangtze River shipments, middlemen and downstream demand is sluggish, market transactions are quiet
.
It is expected that spot trading will continue to shrink next week, entering the high temperature off-season, and the proportion of downstream buying will gradually decline
significantly.

In terms of inventory: this week's Lun aluminum inventory first rose and then fell, the latest inventory reported 1382225 metric tons, and a total of 100 metric tons of inventory was added this week; The total aluminum stock on the Shanghai Futures Exchange this week was 447548 tons, an increase of 14,000 tons, or about 3.
2%,
from last week.
In the middle of each year, aluminum ingot inventory has accumulated to a certain extent, which is the highest
in the whole year.
As of the end of June this year, the total social inventory of aluminum ingots in mainstream areas of the country was 1.
14 million tons, and the futures inventory was 332,000 tons
.
Inventories totaled 1.
472 million tonnes, up 225% from the end of last year and 188%
from 511,000 tonnes in the same period last year.
Last year, because aluminum companies resumed production relatively slowly after reducing production, inventories were low
.
Compared with the same period in history of 14 and 15 years, aluminum ingot inventories are not much higher than in previous years, but the decline in inventory consumption in the middle of the year is slower than in previous years, indicating that the current fundamental supply and demand pattern is still grim
.

In the second half of the year, whether from the perspective of the node of the policy or the operation time given after the introduction of the policy, I believe that the pace of illegal production capacity clearance will accelerate
in the second half of the year.
In terms of aluminum downstream demand, all aspects are flat, and the average annual consumption growth rate is expected to be lower than last year's 6%.

In the second half of the year, the supply and demand of the aluminum market is expected to turn balanced or even slightly short.

Due to the large amount of inventory accumulated in the aluminum market in the first half of the year, it is difficult for aluminum prices to skyrocket
in the second half of the year.
It is expected that aluminum prices are still running in the upward channel in the second half of the year, and the upper space can be seen to 15,500 yuan
in the next half year.