The market bullish sentiment has slowed down, and the performance of Shanghai aluminum is range-bound

The destocking range in the first week of holiday return narrowed significantly, with only 32,000 tons of aluminum ingots destocked, while the increase in the arrival of aluminum rods made the inventory accumulate.

From the perspective of downstream consumption, the construction and medical equipment sector is still performing well, other sectors also have stable performance, the overall order situation in May remained stable, but due to the continuous rise in aluminum prices, the consumption of recycled aluminum processing using primary aluminum instead of scrap aluminum declined, and the willingness of the market to stock up also declined, consumption may be difficult to have a strong performance
in April.

The latest announcement of unwrought aluminum and aluminum exports was 441,200 tons, a sharp decline both month-on-month and year-on-year, which shows that export orders brought about by the epidemic have appeared, and given that the overseas epidemic is still spreading, even if economic activity recovers but the speed is difficult to reach the domestic market, the downward pressure on export orders is still huge
.

On the supply side, the recent rebound in aluminum prices has brought about the continuous repair of smelting profits, resulting in a slowdown in the pace of smelting production reduction, while new investment and resumption of production plans are gradually emerging, including the new investment of Yunnan Wenshan Aluminum Industry and the resumption of production of Inner Mongolia New Hengfeng Energy will provide capacity increments in the near future, while the high price comparison between internal and external prices makes the primary aluminum import window historically open, once the window lasts longer, then overseas primary aluminum will put pressure on the domestic market, and the supply will be "internal and external enemies"
.

On the cost side, domestic alumina prices have continued to rebound in recent days, but this week's spot market activity has declined, after the price increase, traders are cautious in entering the market, downstream procurement willingness is not strong, wait-and-see mood is getting stronger
.
On the supply side, the recent commissioning and production reduction are parallel, the production capacity reduction is relatively large, the supply has been adjusted under the influence of the price, and the supply and demand of alumina prices have been supported and rebounded
.
Subsequent alumina prices still have room to rebound, demand in the new investment of electrolytic aluminum and the resumption of production capacity driven by actually improved, short-term supply adjustment also makes the tight supply and demand pattern will aggravate, but the rebound space is still constrained by overseas alumina prices and subsequent aluminum demand, before the epidemic is not lifted, the overall market demand is difficult to continue to remain optimistic
.

On the whole, short-term consumption still maintains the level of the peak season, although the consumption of alternative scrap aluminum declines, but the situation of destocking can still be maintained, so short-term aluminum prices, but with the recovery of the supply side, and the pressure of export decline, the margin of destocking will gradually weaken, so aluminum prices are still in the game between strong reality and weak expectations in the short term and performance shocks
.
Due to the high ratio of internal and external values, the primary aluminum import window is opened, providing a margin of safety for the internal and external positive sets, and it is recommended to choose the opportunity to cross the market positive sets
.