In the short term, after the aluminum price rebounded, it was under pressure again

Introduction: The Federal Reserve raised interest rates in July, basically in line with market expectations, and the US dollar index continued to fall. Overseas aluminum showed a rebound trend first, while domestic Shanghai aluminum was driven by the external disk to rebound. However, under the background of off-season demand, aluminum ingot inventory began to accumulate, and aluminum prices were under pressure again after the rebound.

1. From a macro perspective, the pressure is slowing down, and the price is rebounding. At the end of July 2022, the Federal Reserve raised interest rates by 75 basis points, and the US dollar index continued to fall. Overseas aluminum showed a rebound trend first, while domestic Shanghai aluminum was driven by the external disk to rebound. However, under the background of low demand season, domestic aluminum prices are under pressure again after rebounding. In the early stage of Shanghai, aluminum rebounded to a certain extent under the support of the cost line. With the accumulation of social stocks of aluminum ingots, aluminum prices showed a trend of rebounding and falling.
2. From a fundamental point of view, as of August 1st, the domestic social stock of electrolytic aluminum was 683,000 tons, and there was another 13,000 tons of warehouse storage. The downstream demand orders continued to weaken. On the supply side, the pressure on the supply side still existed in July, and the new and resumed production capacity in Guangxi, Yunnan and other places in China steadily advanced.
3. On the demand side, the operating rate of aluminum downstream processing leading enterprises remained at 66.3%. In the off-season, the orders of aluminum processing plates were relatively light, and the operating rate of aluminum cable and aluminum profile plates continued to decline. Among them, profiles were dragged down by factors such as off-season, epidemic situation and high temperature, and the overall order increment was insufficient; Aluminum strip, aluminum foil and primary alloy plates started to stabilize, and the downstream demand is still insufficient. On the whole, at present, in the off-season of downstream consumption, the aluminum ingot warehouse is expected to be gradually strengthened, and it is expected that the aluminum price will be weak.

4. The characteristics of off-season are obvious, and the aluminum ingots gradually build up in the warehouse. July-August is the traditional off-season of aluminum consumption, and the orders of downstream enterprises are generally insufficient. At present, the operating rate of aluminum downstream processing leading enterprises is maintained at 66.3%. In the off-season, the orders of aluminum processing plate are relatively light, and the operating rate of aluminum cable and aluminum profile plate continues to decline. Among them, the profile is dragged down by factors such as consumption off-season, epidemic situation and high temperature, and the order increment is insufficient. The construction of aluminum strip, aluminum foil and primary alloy plates is basically stable, the downstream demand is still insufficient, and small and medium-sized aluminum processing enterprises are in a state of reduced production. Downstream demand orders continue to weaken, and aluminum ingot inventory has begun to accumulate. As of August 1st, China's domestic social stock of electrolytic aluminum was 683,000 tons, and another 13,000 tons were stockpiled; LME aluminum inventory is 295,300 tons, which will continue to go to the warehouse; In the previous period, the inventory of aluminum warehouse receipts was 62,200 tons, which continued to go chemical. Looking ahead to the market outlook, the domestic electrolytic aluminum production capacity will continue to be released in August. Under the background of low-season consumption of aluminum downstream, the social inventory of aluminum ingots is facing the pressure of gradual accumulation. It is expected that the aluminum price will be under pressure again, and the weak interval operation will be the main one in the off-season.