Analysis of aluminum price trend in Yangtze River spot market (7.3-7.7)

Macro: China's official manufacturing PMI index rebounded more than expected in June and sat above 50 for 11 consecutive months, and the official non-manufacturing PMI index in June was also better than the previous value
.
China's supply and demand situation has rebounded, indicating that domestic and foreign demand has picked up, and aluminum prices have been strongly supported
.
In addition, there has been new progress in the shutdown of illegal electrolytic aluminum production capacity in Xinjiang, Xinjiang Jiarun has an illegal production capacity of 150,000 tons, involving about 120 electrolyzers of 500 kamper, which are expected to be shut down on July 10; The supply-side reform of the electrolytic aluminum industry is still advancing in an orderly manner, and aluminum prices have risen
.

Market: This week's de-capacity policy continued to ferment, stimulating aluminum prices higher, aluminum prices in East China continued to rise a few days ago, but suppressed by the continued increase in electrolytic aluminum inventory, the continuous upward momentum was insufficient, and there was a slight decline
on Friday.
The overall transaction of the spot market this week is general, the spot quotation continued to rise in the first four days, the shippers' shipment efforts were not reduced, the downstream willingness to receive goods was not good, the market supply was more abundant, coupled with the impact of weak demand, merchants waited more, the purchase volume was relatively limited, more on-demand, and the transaction was limited
.

In terms of inventory: the trend of Lun aluminum inventory continued to decline, the latest inventory reported 1382125 metric tons, and a total of 29,550 metric tons of inventory was reduced this week, a decrease of about 2.
1%; The total aluminum stock on the Shanghai Futures Exchange this week was 433548 tons, an increase of 1,006 tons, or about 0.
2%,
from last week.
As of last Thursday, the total domestic social stock was 1.
1946 million tons, up 0.
95 million tons
week-on-week.
Among them, the social inventory of aluminum ingots in Guangdong was 286,600 tons, a week-on-week decrease of 01,500 tons; the social inventory of aluminum ingots in East China was 827,000 tons (including Shanghai inventory of 262,000 tons, Wuxi inventory of 475,000 tons, Hangzhou inventory of 90,000 tons), an increase of 7,000 tons week-on-week (of which Shanghai decreased by 02,000 tons, Wuxi increased by 13,000 tons, Hangzhou decreased by 4,000 tons); Gongyi inventory was 81,000 tons, an increase of 04,000 tons
week-on-week 。 During the week, Shandong and Xinjiang experienced illegal production capacity shutdowns, to a certain extent, offset the supply pressure brought by new and resumed production, coupled with a slight decline in consumer demand, it is expected that aluminum inventories will show a stable and small increase in the medium term, but in the short term, warehouse arrivals may be slightly reduced
due to poor transportation.

In the future: from a macro perspective, the recent global economic data released is generally good, the monetary policy of European and American countries has turned to tighten, and the euro has also begun to strengthen
recently.
From a fundamental point of view, on the one hand, the spot market continues to be weak due to weak supply and demand in the off-season and the continuous high level of inventory, on the other hand, the expectation of clearing illegal production capacity is getting stronger and stronger, and the dynamic balance between supply pressure and de-capacity expectations continues to tilt
towards the latter.
Continue to pay attention to the implementation of the capacity reduction policy, and the aluminum price is expected to fluctuate strongly
next week.