There is support below the aluminum price, and be wary of the risk of silver ten demand falling short

On the supply side, from January to August 2022, domestic bauxite production totaled 44.
4414 million tons, a cumulative decrease of 30.
47% year-on-year, and a total of 86.
5492 million tons of bauxite was imported, a cumulative increase of 18.
33% year-on-year; From January to September, domestic alumina production totaled 58.
239 million tons, up 8.
6% year-on-year, and net alumina imports from January to August totaled 450,800 tons, down 79.
8% year-on-year; From January to September, domestic electrolytic aluminum production totaled 29.
887 million tons, up 2.
8% year-on-year, and net imports of electrolytic aluminum from January to August totaled 107,200 tons, down 89.
56%
year-on-year.
Domestically, in 2022, the domestic new production capacity will be 1.
8 million tons, the scale of resumption of production will be 3.
238 million tons, 350,000 tons of new production capacity in Guizhou and Inner Mongolia will be invested in the fourth quarter, and 1.
43 million tons in Sichuan and Guangxi will still need to resume production; Yunnan's hydropower supply is insufficient and the production has been reduced to 18%, and the subsequent reduction may continue to expand to 20%-30%, and the scale of production reduction is 100-1.
5 million tons
.
In 2022, the scale of overseas production is expected to increase by 19 million tons, and only 1.
4 million tons will be realized; The scale of production reduction reached 1.
54 million tons, and there are still 150,000 tons of production capacity to be reduced
.

On the demand side, the demand release in the third quarter was insufficient, and orders and starts were relatively weak
.
The average downstream processing PMI from January to August 2022 was 43.
22, the average PMI in the same period of 2021 was 46.
99, down 8% year-on-year, and the average downstream operating rate from January to September fell 5% year-on-year to 65.
5%.

In terms of sectors, aluminum profiles fell 9.
7% to 67.
22%, recycled aluminum fell 6.
9% to 49.
71%, aluminum foil fell 4.
9% to 82.
09%, aluminum strip fell 4.
5% to 80.
35%, primary aluminum rose 1.
39% to 62.
66%, and aluminum cable rose 0.
11% to 55.
5%.

Aluminum prices have shown a downward trend of pressure, and processing fees are difficult to continue to maintain a strong trend
.
Aluminum rods are mostly adjusted from 50-200 yuan / ton; Aluminum rod processing fees fluctuated, Henan Shandong decreased by 25-75 yuan / ton, Inner Mongolia Guangdong increased by 25-50 yuan / ton, aluminum alloy and other finished products fell by 200-1300 yuan / ton
.

In terms of inventory, in terms of exchange inventory, in the third quarter of 2022, the LME accumulated 35,000 tons to 338,900 tons, and the Shanghai aluminum accumulation in the previous period was 18,800 tons to 210,000 tons, in terms of social inventory, the low level of alumina inventory in the third quarter rebounded slightly, the overall accumulation was 76,000 tons to 236,000 tons; the electrolytic aluminum social library was slightly destocked by 19,000 tons to 652,000 tons, and the demand performance was weak under the peak season cycle, and the social library showed a tightening decline and poor destocking; The downstream aluminum rod accumulation cycle is advanced, the aluminum rod inventory first increases and then decreases, and the current inventory is at a historical low, only higher than the level of the same period in 2020, and the overall destocking is 17,500 tons to 98,500 tons
.

This year, the global market is constrained by disruptive factors such as repeated epidemics, geopolitical disputes and energy pressure, and capital risk aversion is strong
.
After the Fed's repeated expected interest rate hikes, the market gradually returned to fundamental logic
.
Overseas aluminum plants have reduced production under the pressure of energy prices, LME aluminum stocks are insufficient, and the supply center of gravity has shifted to China
.
In the first half of the year, the dual control of energy consumption and pressure reduction, the pace of new domestic production resumption was optimistic, and the high temperature in Sichuan and the dry water in Yunnan in the third quarter slowed
down the speed of output release.
On the demand side, there is a divergence between strong expectations and weak reality, new energy vehicles are eye-catching, photovoltaic and other grid-connected projects are advancing, and the cable sector is relatively strong; The downturn in traditional real estate terminals dragged down, downstream profiles, plates, strips and foils and other multi-plate processing orders and starts performed poorly, and the peak season continued to shift
.
In the fourth quarter, overseas energy pressure intensified, and the scale of production reduction will continue to expand; After the domestic increase and decrease in production capacity offset, the overall supply growth rate is tight, the downstream may choose to stock low, the inventory still has room to reduce under the traditional accumulation cycle, the water level of warehouse receipts and social reservoirs are low, and there is support
below the aluminum price.
Pay attention to the follow-up overseas energy progress and relevant policy orientation, and be vigilant against the risk of the failure of the demand of
the silver ten.