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Aluminum: there is still room for prices to rise during the period of environmental protection and production restriction in winter

some time ago, Shanghai aluminum continued to rise significantly. Recently, it fell back quickly and finally returned to the shock range. On the other hand, the price trend of LME spot aluminum in London is basically the same as that of Shanghai aluminum, which also shows a volatile situation after the rise. At the beginning of August, the price was 1887 US dollars/ton. As of September 27, the quotation was 2132 US dollars/ton, an increase of 12.98%

1. Domestic aluminum ingot spot price is synchronized with the futures market

the trend of domestic aluminum ingot spot price is basically synchronized with the futures market. It continues to rise at a high speed in the early stage, and remains volatile and upward in the middle and late stages. The spot price of A00 aluminum in the Yangtze nonferrous metal market rose from 14230 yuan/ton in early August to 16160 yuan/ton on September 27, an increase of 13.56%

2. The weakening of the US index and the fed plus is equivalent to absorbing 1/4 of the excess capacity of crude steel. Interest rates are expected to be strong.

the latest US employment data in August is disappointing, wage growth is weak, and the number of new jobs is less than expected. The non farm employment population in the United States increased by 156000 in August, with an expected increase of 180000, and the previous value of 209000 was revised to 189000; The average monthly rate of hourly wage in August is 0.1%, which is less than the forecast value of 0.2% and the previous value of 0.1%. The slow wage growth also reflects the fact that inflation is weak. The annual rate of the core PCE price index of the United States in July, the core index of the Federal Reserve to observe inflation, was 1.4%, which was still far below the inflation target of the Federal Reserve of 2%. On the other hand, new housing starts in the United States in August were better than expected, with 1.18 million new housing starts in August, with an expected 1.174 million, and the previous value was revised from 1.155 million to 1.19 million; Housing starts fell 0.8% month on month in August, and the previous value was revised from a 4.8% drop to a 2.2% drop, which gave a certain boost to the US dollar index

in addition, the Fed's watch shrinking boots officially landed. By referring to the practice of the world's best testing laboratory, the Federal Reserve announced the interest rate decision in September, keeping the benchmark interest rate unchanged at 1%-1.25%. At the same time, it announced that it would start a gradual passive table contraction from October this year, and would announce the initial upper limit of mortgage-backed Securities (MBS) reinvestment on October 13. The decision was unanimously approved by the FOMC, and the result was basically expected, and the US dollar index also rose

3. The import volume of alumina upstream of aluminum ingots increased significantly

in July, our project will strongly promote Daxie to build the world's largest and most competitive MDI and HDI manufacturing center. The import volume of unwrought aluminum and aluminum products was 45210 tons, a year-on-year decrease of 22.87% and a month on month decrease of 10.62%. In July, the import volume of alumina was 284504 tons, a sharp increase of 29.36% year-on-year, and an increase of 2.86 times month on month

4. The output of primary aluminum is shrinking at the beginning.

on the one hand, with the continuous rise of the price of primary aluminum, more and more electrolytic aluminum production capacity has resumed production; On the other hand, the flag of capacity reduction is constantly waving, and many small and medium-sized and closed backward capacity are permanently closed. After six consecutive months of output growth, electrolytic aluminum showed a year-on-year decrease for the first time in July

alumina production began to decline a month earlier, but still maintained a large year-on-year growth. In July, China's alumina output was 6.028 million tons, with a year-on-year increase of 9.3% and a month on month decrease of 4.55%

5. The operating rate of electrolytic aluminum continued to decline after the inflection point.

we can see that although the total capacity of electrolytic aluminum has steadily declined this year, the production capacity in progress has experienced an inflection point after the growth in the first half of the year, and has continued to decrease in the second half of the year. Moreover, the operating rate of electrolytic aluminum also began to turn downward in the second half of the year, and the heating season in the fourth quarter of the future will continue to maintain a downward trend

6. Domestic inventories hit new highs

after the effective contraction of the upstream supply side, the global primary aluminum began to enter the destocking cycle. Recently, Lun aluminum's inventory has continued to decline, but the cancellation rate of warehouse receipts is rising, which also shows that the global supply of primary aluminum is relatively tight. Compared with Lun aluminum, the original aluminum inventory of the previous period is just the opposite, and has been in the process of continuous accumulation since December last year. This shows that disk prices are rising, and manufacturers and traders are actively hedging

7. Outlook

since August, Shanghai aluminum has experienced a sharp rise at the beginning of the month and a sideways consolidation in the later period, and the overall trend remains a complete upward trend. The trend of Lun aluminum is basically consistent and relatively stronger. From the fundamental point of view, environmental protection supervision continues to be carried out on a large scale, coupled with the continuous deepening of electrolytic aluminum production capacity, the primary aluminum supply industry is gradually reducing. Spot prices are also rising, and the discount with the disk continues to shrink. The downstream consumer side has been tepid this year, and the downstream, which lacks obvious growth points, will also usher in the peak consumption season of gold, silver and ten. It is expected that the spot trade situation will continue to improve. On the other hand, we need to pay attention to the ultra-high inventory of domestic aluminum ingots. The continuous confrontation between disk hedging and speculative funds makes the trend more confusing. On the whole, there is still room for Shanghai aluminum to rise. We suggest taking the operation idea of adding more on bargain hunting but not chasing more, with the upper target of 17300

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