The demand side is not pessimistic Shanghai aluminum still has an upward foundation

In terms of news, the European energy crisis fermentation, coupled with the tightening of Russian natural gas supply caused market supply concerns, the current domestic electricity prices fluctuated little, overseas electricity costs hit a record high for aluminum prices to build a bottom, the end of the year domestic production increase and decrease news is relatively transparent and there is no bright spot, aluminum ingot social library is still in the destocking stage but the rate began to slow down, the fundamental supply pattern has not turned
.

On the supply side, production will pick up slightly month-on-month in December, supply is at a low level during the year, and the new project in Longlin, Guangxi is expected to start production in January, and the overall domestic supply is expected to increase
slightly month-on-month.

On the consumption side, the year-on-year decline in real estate sales area in November narrowed and increased month-on-month, indicating that the real estate market has gradually improved under the background of loosening real estate policies; Demand continues to improve, and aluminum ingots are in the seasonal destocking stage
.

In terms of inventory, exchange inventory, LME returned to the rhythm of destocking, last week destocking 15,400 tons to 964,200 tons; Shanghai aluminum last week destocking 01,300 tons to 329,100 tons
.
In terms of social stocks, alumina accumulated 08,000 tons to 278,000 tons last week, and the inventory level was only higher than the level of the same period in 2018, which was at a historical low; the pace of destocking of electrolytic aluminum social destocking began to slow down, with 46,000 tons to 864,000 tons last week, and Wuxi and Gongyi contributed mainly to the reduction
.
Aluminum rod stocks rose 05,000 tonnes last week to 83,500 tonnes
.

Overall, the cost of electrolytic aluminum is still falling, the supply of electrolytic aluminum is expected to increase, the fundamentals are favorable and there are signs of marginal loosening, and the 20,000 mark may still be under pressure
.
However, at the same time, it is necessary to pay attention to whether the tightening of supply due to European energy problems will lead to the further expansion of the shutdown of European aluminum companies
.
In the medium and long term, the supply side is still limited, and the real estate policy is relaxed, the demand side is not pessimistic, and the aluminum price still has a basis for upward rush
.