The upward driving force of aluminum prices is not obvious Beware of the risk of a high fall

On the supply side: transportation in some areas, especially in Xinjiang, has been affected to a certain extent, Xinjiang has a large volume, supply and consumption in some areas have been restricted to a certain extent, the number of asymptomatic infections in Guangdong has gradually increased, and aluminum production has declined slightly; Rumors of continued production cuts in Yunnan have affected production capacity by 20%-30%, and the power problem may not be alleviated, and the possibility of continued production cuts is not ruled out in the future; The resumption of production in the remaining regions and the release of new production capacity as planned, the overall supply may continue to rise
.
European electricity prices have reached a new high, which has a greater impact on the output of high-energy-consuming industries, if energy prices remain high, then European electrolytic aluminum production capacity may continue to decline
in the future.
The output of electrolytic aluminum in October was 3.
459 million tons, +7.
5% year-on-year and +5.
1%
month-on-month.
Production is expected to grow at a rate of 1-2% in November
.

Demand: The marginal impact of the epidemic in Henan and Xinjiang has decreased, and the operating rate of plate, strip and foil remains at the high point
of the year.
The Federal Reserve has started the cycle of interest rate hike and balance sheet reduction, and the trend of overseas economic highs has been established, dragging down the overseas demand for electrolytic aluminum, but due to the conflict between Ukraine and Russia, the rise in energy prices has led to an amplification
of the supply gap.
Domestic demand still needs further efforts
from the steady growth policy.
With the expectation of overseas shortfall, the expectation of increasing the export of China's aluminum products in the later period has risen, and the current consumption is gradually recovering, and the demand for aluminum rods, plates, strips and foils has improved
.
In 2022, the amount of power grid investment will reach 550-600 billion, a record high, and this information will have a supporting effect
on aluminum prices.

In terms of inventory: last week's aluminum ingot inventory continued to destock, aluminum rods slightly accumulated, it is expected that next week aluminum ingots will still be slightly destocked, aluminum rod social inventory increased by 0150000 tons from last week, aluminum ingot social inventory decreased by 25,000 tons
from last week.
It is expected that the rhythm
of destocking will continue in the future.

In the short term, Shanghai aluminum by the improvement of macro sentiment, news real estate consumption to boost expectations and fundamentals of low inventory and other factors, prices have been boosted and a strong trend, but in the long run, the fundamentals are still in the context of supply and demand double growth, the current supply side has not heard the news of new production reductions, production capacity continues to recover, and demand performance is more general, policy stimulation real estate will slowly improve, but downstream demand will still experience a longer recovery process
。 In addition, aluminum ingot social library still has a certain accumulation expectation, aluminum price upward driving force is not very obvious, if the recovery of high-frequency data of real estate demand is not as expected, the supply side will be reflected to the inventory through the form of accumulation, continue to put pressure
on the plate.