Analysis of aluminum price trend in Yangtze River spot market (8.14-8.18)

Macro aspects: Macroeconomic and geopolitical events have been more frequent
this week.
Due to the ambiguous attitude towards racism, US President Trump is losing the support of some elites, there are market rumors that Trump's chief economic adviser Cohen has quietly resigned, the two major business executive advisory committees of the White House have also been disbanded, Trump's "US version of four trillion" plan is in jeopardy, US stocks have suffered serious setbacks, and the S&P 500 index has fallen the most in 3 months, which has also dragged down the overall weakness of the US dollar index this week
.
On Friday, Spain suffered its first terrorist attack in 13 years, with funds once again in safe haven demand and the dollar index hit again
.
This has also helped aluminum prices rise
to a certain extent.
Domestically, at the beginning of this week, the previous period began to increase the trading margin of rebar, once made base metals worried about the risk and pressured, aluminum prices are no exception, the beginning of the week was suppressed, but then dominated by good news, ended a short pullback to re-test, although there are profit orders at the high level, but bears are in the worry of news risk in the weekend concentrated exit to aluminum prices formed a lower support, the overall performance is still strong
.

In terms of the market: the spot discount before delivery gradually narrowed from 200 yuan / ton to 100 yuan / ton, and the spot discount after delivery remained between 230 ~ 200 yuan / ton, and the downstream was afraid of high aluminum prices, coupled with the fact that it was still in the off-season of consumption, so the buying interest was low, and the transaction within the week was mostly a cash arbitrageur.

The high inventory is difficult to digest, and the spot discount of more than 200 yuan / ton is difficult to narrow
.
It is expected that the spot discount will remain in the range of 240~200 yuan / ton next week, the trading volume will remain low, and the market will still expect the spot arbitrageur as the main contributor.

In terms of inventory: this week's London aluminum inventory maintained a trend of first falling and then rising, the latest inventory reported 1287075 metric tons, and a total of 3250 metric tons of inventory increased this week, an increase of about 0.
25%; The total aluminum stock on the Shanghai Futures Exchange this week was 486792 tons, an increase of 13,431 tons, or about 2.
8%,
from last week.
This week, LME inventories continue to create a record low since 08, but at the same time, the proportion of written off warehouse receipts is also declining, currently accounting for only about 18% of the total inventory, so it is expected that the decline rate of LME aluminum inventories will gradually slow down, coupled with the international aluminum demand since the third quarter has slowed down, the short-term aluminum market shortage may have some relief
.

In the future: domestic aluminum prices returned to the rally after adjustment last week, and the main contract hit a new high since April 2012, and after two consecutive days of sharp rises, it encountered Black Friday, but the overall rise has not changed
.
At present, the domestic supply-side reform is about to enter the peak period, Hebei, Shandong, Zhejiang and other places have strict environmental protection inspections, small and medium-sized smelting enterprises are more affected, most of them are in a shutdown state, aluminum prices or certain support, is expected to continue to rise
.
However, there is still nearly a month before the next wave of supply-side reform, and the short-term market has not introduced a favorable supply, and aluminum prices may fluctuate repeatedly, and you can buy
an appropriate amount when there is a pullback.
It is expected that aluminum prices will remain volatile next week
.