Analysis of LME aluminium inventories in the previous period of 2016

At the beginning of the year, as manufacturers started work one after another, aluminum ingot inventory arrived again, domestic aluminum inventory suddenly increased, and the inventory of the Shanghai Futures Exchange in the first quarter showed an overall upward trend
.
As of June 24, the previous Shanghai aluminum inventory reported 184953 tons, down 61,674 tons or 25% from the end of May, a three-month reduction, and a decrease of 112,000 tons or 37.
3% from the end of December 2015, hitting a low point since December 27
, 2013.

Since the beginning of the third quarter, because the inflection point of domestic supply and demand has not yet arrived, aluminum inventories have continued to grow
slowly at a low level.
However, the latest data show that domestic and foreign aluminum inventories continue to grow, as of December 16, LME aluminum stocks reported 2,117,500 tons, a sharp increase of 28,075 tons per day; In the same period, the aluminum inventory in the previous period was reported at 96,196 tons, a sharp increase of 9,534 tons, far lower than the average inventory of 200,000 tons during the year, and hit a low point since September 28
, 2007.

In recent days, domestic aluminum stocks have increased significantly, of which Wuxi has increased by up to 25,000 tons, due to its high premium to promote the flow of aluminum ingots from Gongyi and other production areas to Wuxi
.
The South China Sea fell by 8,000 tons, mainly due to the increase in demand for aluminum rods due to the increase in environmental protection in Foshan and the acceleration of the speed of aluminum ingots out of storage
.
Aluminum rod inventories showed a continuous slight decline, of which Foshan fell by a large margin, mainly due to environmental protection problems that led to the shutdown of small aluminum factory furnaces, resulting in strong demand for aluminum rods
.
In terms of processing fees, the main six major aluminum rod markets, except for Foshan processing fees soared by 700 yuan / ton compared with the previous period, other regions increased by less than 100 yuan / ton in the same period, and the continuous decline in aluminum rod inventory could not reflect the recovery of downstream demand
.

With the continued increase of aluminum inventory, domestic aluminum prices all the way down, below the average support, in the case of electrolytic aluminum production continues to reach a new high, aluminum price pressure is still there, it is expected that the short-term will continue to shock downward, looking forward to the future market, consumption off-season meets the short-term supply and demand imbalance caused by the continuous increase in inventory is still the main factor
leading the current aluminum price.