Commodities plummet, space will open up below Shanghai aluminum

Overseas, recession expectations intensified, crude oil hit a new low in nearly two months, U.
S.
oil fell more than 8%, and crude oil fell more than 9%.

European natural gas hit a four-month high
for five consecutive days.
The dollar index broke through 106.
00, the euro hit a new low in more than 19 years, the ruble fell by more than 10%, and risk assets fell
sharply.
Domestically, China's Caixin services PMI in June was 54.
5 versus 49.
6 expected and 41.
4 previously, returning to expansion territory for the first time after three months of contraction and rising to the highest since
August 2021.
Maintain the basic judgment
of overseas recession and rebound in the domestic downcycle.

In terms of inventory, LME stocks continued to decline to 362,500 tons, the lowest value since 2001, and the decline in inventory was still reflected in the continued departure of warehouse receipts, which is currently 204,300 tons, accounting for 56.
3% of warehouse receipts, a slight decrease
from the previous period.
The spot pair March contract is still at a continuous discount of about $20/mt
.
LME available stocks have remained relatively stable in the near term after falling from a low of around 600,000 tonnes in February to mid-June lows, and it remains important to watch closely for signals of a bottoming out of available
stocks.

Domestically, SMM electrolytic aluminum social inventory of 734,000 tons on Monday was unchanged from last Thursday, and only Wuxi remained destocked
.
Inventories in both the South China Sea and Gongyi regions increased
slightly.
Overall, outbound data has begun to decline
month-on-month.
In the later stage, with the gradual digestion of the impact of warehouse receipt pledge emergencies on inventory and the poor order situation, destocking may face challenges
.

Yesterday, the spot quotation of Mysteel Wuxi was 19020 yuan / ton, Foshan area 18970 yuan / ton, Gongyi area 18920 yuan / ton
.
Aluminum prices fell sharply, but spot trading in various regions continued to decline
.
Macro pressures combined with poor terminal orders led to cautious purchasing, and stockpiling
began to accumulate in some regions with the arrival of the off-season.
During the same period, the transaction volume in Gongyi, which was active in the early stage, fell significantly due to the increase in arrivals and the beginning of production reduction by downstream processing enterprises
.

Overall, overseas supply and demand are expected to fall double, but concerns about lower demand exceed supply contraction, and domestic supply and demand are expected to pick up the pattern, but supply pressure may exceed the recovery
of demand.
On the whole, the fundamental pressure of the aluminum market has increased, the external strength and internal weakness pattern have weakened, the internal and external prices have risen rapidly, the market sentiment is extremely pessimistic in the short term, and the aluminum price has fallen sharply after paying attention to the signs
of spot support.
In the medium term, superimposed on the accumulation of macro pressure, the strategy of the third quarter is recommended to rebound and sell short
.