Analysis of aluminum price trend in Yangtze River spot market (8.7-8.11)

Macro: Abroad, the US non-farm payrolls report for July performed strongly, igniting investors' enthusiasm for long, coupled with the sharp rise in black commodities also drove the bullish atmosphere in the market, in addition, although the US dollar index was supported at the bottom this week, the overall pattern of shock bottoming, coupled with the United States and North Korea throwing tough words to each other to make the situation on the Korean Peninsula tense again, thus leading gold to rise, but this did not prevent base metals from "playing triumph" this week, several basic non-ferrous metals have recorded large gains, and the external aluminum price performance is eye-catching , leading the banner
of non-ferrous metal volume and price.
Domestically, there is news of supply-side reform in China again
.
Under the premise that nearly one-eleventh of China's electrolytic aluminum production capacity is facing investigation, with data released by the International Nonferrous Metals Association, from January to May 2017, the international primary aluminum market was short of 735,000 tons
.
The reduction in supply is accompanied by the fundamentals of shortages, which can be explained
by the sharp rise in the price of external aluminum.

Market: Compared with the hot aluminum market, the performance of the current aluminum market is obviously dwarfed
.
This week, the current aluminum market has shown a pattern of "rising and quiet", and the performance of the market is more flat
after the rapid rise.
According to downstream reflections, the current orders with the rise in the price of aluminum ingots have been difficult to achieve, and the completion of orders will fall into a loss, so the current basically will not purchase aluminum ingots to do, and buyers are currently with the high cost has gradually reduced the orders, which further hits the current aluminum ingot trading
.
Limited by inventory pressure, the current aluminum with the strength of the rise relative to the period of aluminum is not enough, in South China inventory is also higher this week, with the surge of aluminum futures, the profit margin of the holder has expanded sharply, so it is generally at a high level of active profit shipments, relative to the current month futures discount even reached 200 yuan outside, but the transaction is still few
.
The rise of aluminum in the off-season is more unfavorable for downstream consumption, and the rapid rise also makes the market obviously afraid of the current aluminum price, so next week's aluminum trading situation still depends on the downstream acceptance of aluminum prices, if aluminum prices continue to remain stable, just demand or gradually appear
.

In terms of inventory: this week's Lun aluminum inventory maintained a straight downward trend, the latest inventory reported 1283825 metric tons, a total of 47,350 metric tons of inventory was reduced this week, a decrease of about 3.
6%; The total aluminum stock on the Shanghai Futures Exchange this week was 473361 tons, an increase of 11,981 tons, or about 2.
6%,
from last week.
From the perspective of global inventory, although the inventory of the Shanghai Futures Exchange continues to increase, it does not affect the global pattern
.
At the end of May, the total inventory of aluminium held on the four exchanges in London, Shanghai, the United States and Tokyo was 1.
92 million tons, compared with 2.
801 million tons
at the end of May 2016.
Short-term domestic inventories have a certain pressure on aluminum prices, but considering the shortage of aluminum supply worldwide, or the reduction of domestic inventories after the peak season, aluminum prices may rise
further.

In the future: On the whole, the increase in electrolytic aluminum production and high inventories have put pressure on aluminum prices, but under market speculation, the supply-side reform process of the aluminum market has accelerated, and the rise in aluminum prices is still obvious
.
However, considering that Trump's tough attitude towards North Korea has put pressure on commodities, in addition, after several days of rising, short-term chasing needs to be cautious, beware of pullbacks, it is expected that next week's domestic aluminum prices will fluctuate at a high level, operating in the range of 15500-16500, if the news is transmitted again, it is not ruled out that Shanghai aluminum will have the possibility
of a big rise.