Aluminum prices fluctuate at a high level Fundamentals still have some support in the short term

According to foreign media reports, Ghana's only aluminum company VALCO due to some workers invaded the company during the protest, the company asked the Ghana Power Grid Company to cut off the power to the smelter and stop production, the company built a capacity of 200,000 tons, due to lack of maintenance, only 2 of the 5 production lines are in operation, and the operating capacity before the shutdown was about
80,000 tons.

In terms of domestic supply, China's electrolytic aluminum production in October 2022 (31 days) was 3.
4134 million tons, an increase of 7.
8% year-on-year, and the cumulative domestic electrolytic aluminum production from January to October 2022 reached 33.
303 million tons, a cumulative increase of 3.
3%
year-on-year.
The increase in production in October was mainly in Sichuan and Inner Mongolia
.
Recently, some aluminum plants in Henan and Shandong have planned to reduce some production capacity due to poor profitability of high-cost enterprises and environmental protection requirements in the heating season, and the scale of production reduction is expected to reach about 200,000 tons.

In terms of demand, downstream demand affected by the epidemic is currently weak, and the overall procurement is mainly
based on rigid demand.

On the whole, affected by the epidemic and transportation obstruction in many places, the social inventory of domestic aluminum ingots remained low, and the overall spot market was tight
.
In the short term, the fundamentals of domestic aluminum prices still have some support, but the current US dollar liquidity impact and the expected strengthening of global terminal demand are still the market's concerns, and it is recommended to treat
it with the idea of high selling and low absorption.