Analysis of aluminum price trend in the domestic spot market in April

Macro: at the beginning of this month, due to the construction plan of Xiong'an New Area, the market reacted strongly to this plan, related infrastructure stocks rose sharply, domestic Shanghai aluminum shock rose, and later because of the 2 million tons of electrolytic aluminum production capacity under construction in Xinjiang was stopped, the main force of Shanghai aluminum rose sharply, hitting a new high since April 2013, but due to market inventory pressure to inhibit the rise of aluminum prices, and capacity reduction is a long-term effect, short-term speculation factors are stronger, aluminum price rally is limited
。 After that, the market rumored that many domestic production capacity resumed production, it is reported that Chalco Zunyi Aluminum plans to resume production of 160,000 tons/year of electrolytic aluminum production capacity on May 1; Chongqing Tiantai Aluminum Co.
, Ltd.
will resume production of 60,000 tons/year of electrolytic aluminum production capacity on May 20; Guangxi Hualei New Materials Co.
, Ltd.
's new 500,000 tons/year electrolytic aluminum production capacity will be put into operation on August 28, and the resumption of production will undoubtedly suppress the trend of aluminum prices
.

Market: At the beginning of the month, due to the Chinese government's announcement of the construction plan of Hebei Xiong'an New Area, the center of gravity of aluminum prices moved upward, and in the middle of the month in Changji Prefecture, Xinjiang, 2 million tons of illegal electrolytic aluminum production capacity stopped, further stimulating aluminum prices higher, spot aluminum prices immediately soared, but spot aluminum ingot inventories remained high, domestic aluminum fundamentals were weak, it was difficult to support aluminum prices to continue to rise, and the second half of the month fell into a volatile consolidation market
.
At the end of the month, downstream merchants entered the appropriate amount of low replenishment before the holiday, but the overall demand was not large, and the holders were bullish on the aluminum market, and the psychology of selling gradually rose, and continued to hold up the price of shipments, and the price once maintained a premium out, and the market trading situation was general
.
At present, in the absence of further implementation of supply-side reform, the spot market has weakened, the market mentality has also begun to weaken, and the aluminum market may have further correction
.

In terms of inventory: Recently, the inventory of London aluminum continued to decline sharply, as of April 28, the latest inventory was reported 1645375 metric tons, and a total of 42,500 metric tons of inventory was reduced during the week, a decrease of about 2.
5%; The total stock of aluminum on the Shanghai Futures Exchange was 391578 tons, an increase of 12,544 tons, or about 3.
3%,
over the previous week.
As of April 28, social stocks fell slightly to 1.
201 million tons, down 04,000 tons from the beginning of the week and 02,000 tons from the end of last week, and the overall upward trend of stocks has eased
.
In the later stage, due to the resumption of electrolytic aluminum production capacity and the launch of new production capacity, it is expected that the domestic aluminum ingot inventory will increase again in 2017, and the spot aluminum high premium pattern may be difficult to continue
.

Aftermarket analysis: At the end of the month, the domestic market coincided with the May Day holiday, investors have maintained a cautious wait-and-see, the market trading is light, and aluminum prices remain volatile
.
In the market, some aluminum companies are said to have resumed production in May, the resumption of production will undoubtedly suppress aluminum prices, coupled with the current market inventory pressure, the oversupply situation in the aluminum market is difficult to change, aluminum prices in May are not optimistic, the upward trend
is weak.