July 16 Shanghai aluminum brief comment

In terms of fundamentals, SMM inventory on the 15th reported 832,000 tons, down 2.
6 tons from last Thursday, and the dematerialization of inventory slowed down during the week; during the same period, the steel union statistics aluminum rod inventory was 132,500 tons, down 015,000 tons from last Thursday; the export of unwrought aluminum and aluminum products in June was 454,000 tons, 15,300 tons month-on-month, and the export performance was stable; Yunnan's resumption of production and new production is still slow, Shanxi Zhaofeng has recently started to resume production of 100,000 tons; there is a shortage of power supply in many places, Henan processing enterprises have limited power and stopped production, and Yunnan is expected to resume production again
。

On the macro front, the US CPI and PPI data maintained high growth, but Powell announced to Congress yesterday that he still adhered to a dovish stance, coupled with the central bank's RRR cut yesterday, market sentiment improved
.
From a fundamental point of view, the "ceiling" limit of electrolytic aluminum production capacity and the pressure of the dual carbon policy, coupled with the extension of the power curtailment time in Yunnan, put pressure on aluminum supply; Downstream demand has entered the off-season, and short-term demand disturbances exist, but new energy demand has grown rapidly and has improved in the long term
.
From the perspective of inventory, the domestic electrolytic aluminum social inventory is seasonally destocked, but the destocking is not as smooth
as the same period of previous years.
Short-term fundamentals have improved slightly, and in the long run, aluminum fundamentals are
well supported.