Analysis of aluminum price trend in Yangtze River spot market (7.17-7.21)

Macro: Domestically, aluminum prices have risen 13% this year, rising prices have prompted producers to restart idle capacity, resulting in increasing production, National Bureau of Statistics data show that China's primary aluminum production in June was 2.
93 million tons, an increase of 7.
4% over the same period last year, and primary aluminum production from January to June was 16.
84 million tons, an increase of 8.
8%
year-on-year.
The rising production of aluminum has aggravated market surplus concerns, the price of Shanghai aluminum has been frustrated and fell, coupled with the aluminum market entering the off-season, and the gradual reduction of new orders from enterprises, which has also put pressure
on Shanghai aluminum prices.
Abroad, global primary aluminum production rose to 5.
04 million tons in June, and Alcoa raised its forecast for China's aluminum oversupply while expecting demand growth, causing aluminum prices to fall under pressure this week, in addition, Rio Tinto Group's bauxite production reached a record high of 12.
9 million tons in the second quarter, an increase of 7% year-on-year.

Market: East China, the market speculation aluminum enterprises production sentiment gradually weakened, aluminum prices again encountered high inventory pressure, rebound momentum is insufficient, this week fell into a high shock market, the current aluminum price is at a recent high, holders of high shipments actively, the market supply is abundant, but high prices inhibit downstream procurement interest, fear of decline and wait and see more, demand enterprises buy a small amount, traders are also more cautious, market transactions are less, not as good as last week
。 South China, this week South China aluminum ingot prices are slightly better than East China, as of Friday aluminum ingot ticket price is about 14,500 yuan / ton, a slight increase of 40 yuan / ton from last Friday, the South China market is abundant, but downstream processing enterprises have fewer orders and fear of falling sentiment, the purchase volume is relatively limited, and the transaction is also inferior to last week
.

In terms of inventory: the inventory of London aluminum maintained a downward trend this week, the latest inventory was reported 1354550 metric tons, and the total inventory was reduced by 27,675 metric tons this week, a decrease of about 2%; This week, the total aluminum stock of the Shanghai Futures Exchange this week was 454646 tons, an increase of 7,098 tons, or about 1.
6%,
from last week.
At present, aluminum prices are still led by policies, and the work of cleaning up illegal production capacity continues to advance, and aluminum prices are expected to remain strong in the medium and long term; In the short term, it is in the initial stage of capacity reduction, the production reduction progress is tortuous, the effect is difficult to reflect on the inventory data, and the momentum of aluminum prices is insufficient
under fundamental pressure.

Future: This week's macro situation was relatively stable, the European Central Bank released a signal of currency contraction, the euro broke through the volatility range of recent years, and the dollar continued to weaken
.
From the perspective of industry fundamentals, the overall increase in production capacity and production, and the accumulation of spot inventories continued to accumulate, which raised global concerns about oversupply, and spot aluminum prices rose weakly this week
.
The market has entered the off-season, sluggish demand puts pressure on aluminum prices, aluminum prices rose in the first half of this year, driven by profits, the resumption of production swept the entire nonferrous market, high inventories suppressed aluminum prices, and aluminum prices are expected to maintain narrow fluctuations
next week.