Aluminum price volatility is weak, mainly running weak demand in the off-season to suppress prices

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 aluminum ingots are still slightly destocked, aluminum rod social inventory of 91,500 tons, an increase of 6,000 tons from the previous week, aluminum ingot social inventory of 49.
7 down 13,000 tons
from the previous week.
It is expected that the rhythm
of destocking will continue in the future.

Looking forward to the future market, aluminum price volatility is mainly weak, weak demand in the off-season to suppress aluminum prices, but low inventory will give price support
.
At present, the domestic aluminum ingot social library is still at a low level, and the destocking is still continuing, and before the inventory inflection point has not appeared, if it is not for the macro to exceed the expected major bearishness, it is expected that there will still be support
below the aluminum price.