Metal prices generally bottomed out The aluminum market is running at the bottom

While domestic epidemic control has been effective and expectations of gradual recovery of economic activity have risen, the global epidemic has accelerated
.
The Fed's first 50BP emergency interest rate cut since the start of the financial crisis strengthened market concerns about the epidemic, and European and American stock markets plummeted
.
At the same time, crude oil fell
sharply due to the breakdown of production cut talks.
Affected by the strong impact of the stock market and crude oil, metal prices have generally carried out a second bottom, and Lun aluminum and Shanghai aluminum have fallen below the 1700 US dollars / ton and 13000 yuan / ton mark
.

With the spread of the epidemic and the expansion of testing samples under the attention of various countries, cases have appeared in more than 100 countries around the world, and the top countries and regions with confirmed numbers are: Italy, Iran, South Korea, France, and European countries are paying attention to epidemic prevention and control
.
In the United States, from the Fed's emergency interest rate cut to the plunge in risk assets, the United States has joined the epidemic prevention and control, and the number of confirmed cases is expected to accelerate
.
As of the evening of the 10th Eastern time, at least 1,004 new coronary pneumonia cases have been confirmed in the United States, including at least 31
deaths.
From the lack of attention paid by some countries to active or passive participation in epidemic prevention, the risks are gradually becoming clearer, which is better
than the previous state of insufficient exposure.
Next, we must look at the prevention and control measures of countries around the world, and non-ferrous metals test the bottom
in the risk release.
Another risk to the market is that the oil price war continues
.
Saudi Aramco said it received instructions from the Department of Energy to increase the company's maximum sustained capacity from 12 million b/d to 13 million b/d, putting renewed pressure on crude oil, which is detrimental to Lun Aluminum
, which has strong energy attributes.

The impact of the domestic epidemic impact on electrolytic aluminum production is limited to the slight delay in the launch of new production capacity, and the impact on the original production capacity is very limited
.
From January to February, the cumulative output of electrolytic aluminum in China was 6.
02 million tons, and the cumulative output from January to March is expected to be 9.
15 million tons, a year-on-year increase of 4.
5%.

During this period, the price of alumina rose from 2450 yuan / ton to 2600 yuan / ton, and the profits of the electrolytic aluminum industry were squeezed to a loss state by rising costs and falling product prices
.
However, the current production recovery comes more from the commissioning and resumption of production
before the Spring Festival last year.
Therefore, the current level of losses is difficult to significantly support
output.

Domestic aluminum consumption was basically stagnant in February, and the progress of resuming work and production in March was also slow, resulting in a large accumulation of intermediate aluminum rods and finished aluminum ingots, which increased by more than 850,000 tons to 1.
5 million tons
compared with before the Spring Festival.
As pre-holiday stocks fell to 620,000 tonnes, it served as a good reservoir for phased oversupply
.
After the success of domestic epidemic prevention and control, the focus of various industries will shift to economic recovery, and we expect consumption in the second quarter to recover to 3%, and destocking will also occur
again.
It is worth noting that, on the one hand, the advantage of low inventory is no longer there, and the growth of supply and the high inventory base have led to a decline in the destocking rate; On the other hand, the global epidemic prevention and control is bound to affect the consumption of primary aluminum in the global market in the second quarter, putting pressure on the consumption growth of 3%, making the space for the later rebound of aluminum prices unimaginative
.

In the medium and long term, the government's focus on boosting the economy will choose new infrastructure, and at the same time, more places will start the "adaptation of local conditions"
to real estate.
Real estate serves as an alternative to hedge against the economic downturn, and aluminum consumption is highly correlated with real estate, providing the main increment
for aluminum consumption this year.
However, other consumption of aluminum has not grown, especially the poor performance of aluminum exports, and the profit window for some basic aluminum exports has closed
.
Combined with a drop in global demand due to the pandemic, the export outlook has been exacerbated
.

As the global pandemic risk accelerates, metals are at the bottom of
the tentative bottom.
From the current price of 12,800 yuan / ton of Shanghai aluminum, the industry has lost money, and domestic consumption tends to improve month-on-month, and the space below it is limited, but to repair upwards requires the global epidemic control effect to appear, which takes a certain amount of time
.
Due to the weakening of the advantage of low inventory, the market lacks obvious consumption growth momentum, and the bottom running time and rebound height of aluminum prices are worse than zinc and copper
in the colored plate.
In terms of operation, it is appropriate to wait and see in the short term, wait for the global epidemic to be properly controlled, and intervene to win more than the recovery of aluminum prices brought about by the economy to promote consumption and confidence
.
From a longer-term perspective, after the aluminum rebound, there are still opportunities
to sell short at highs.