January 6 Shanghai aluminum brief comment

On the macro front, the Fed's renewed emphasis on the need to accelerate interest rate hikes has further disturbed
market sentiment.
On the supply side, the "14th Five-Year Plan" raw material industry development plan clearly requires the carbon reduction target of the electrolytic aluminum industry, coupled with the high electricity price caused by the overseas natural gas crisis, Germany, Romania and other places have launched large-scale production reduction and shutdown plans, and the problem of electrolytic aluminum supply has become more and more prominent; On the demand side, social inventory has now fallen to 812,000 tons, and the market supply and demand structure has been quickly repaired, but the global chip shortage crisis still exists, superimposed on the Spring Festival approaching, terminal demand has fallen into the off-season
.

The cost side is currently in the grinding stage, and the room for decline is limited
.
Recently, European electricity prices are still high, causing many overseas aluminum plants to implement production reduction measures, superimposed costs and inventories, electrolytic aluminum upward support is strong, short-term aluminum price rebound momentum is still strong
.
However, after the year, some aluminum plants have resumed production one after another, and a number of projects have been put into operation, and the upward trend of medium and long-term electrolytic aluminum may be subject to certain resistance, and it is difficult to maintain
sustainability.