Shanghai aluminum afternoon review on October 25

On the cost side, although alumina prices still rose last week, the downward revision of thermal coal prices caused the cost support of electrolytic aluminum to collapse
.
On the supply side, Guizhou today reported power rationing, requiring the withdrawal of all production capacity
within 5 days from the 21st.
Guizhou's current electrolytic aluminum operating capacity is about 1.
3 million tons, accounting for about 3.
4% of the country's total production capacity, if the production reduction is implemented as scheduled, it is expected to lose about 240,000 tons of production by the end of December, this production reduction news may weaken the downward trend
of electrolytic aluminum last week.

On the demand side, downstream processing enterprises are further affected by electricity, and the overall operating rate has declined
.
In addition, the consumption of the real estate sector continued to weaken, and the completed area of housing in September fell month-on-month, which has been at a relatively low level in nearly five years, even if aluminum prices fell last week, there was no significant increase
in construction orders.
After October, orders from northern enterprises will fall seasonally, and the negative impact of demand on aluminum prices will be marginally strengthened
.

On the macro front, over the weekend, Fed Chairman Jerome Powell said that the time had come to taper bond purchases, and Taper expectations strengthened in November
.
In the short term, the strong support of aluminum price cost is no longer strong, and the weak demand impact reflected by the accumulation has increased, but the current price is close to the cost line, and the main theme of dual control of energy consumption has not changed, and there is still the possibility of further production restrictions in various places in the fourth quarter, so the possibility of continuing last week's deep correction is not high
.