Analysis of aluminum price trend in Yangtze River spot market (3.19-3.23)

Macro aspect: A number of heavy data releases this week have a deep
impact on the trend of the metals market.
One is the Federal Reserve's FOMC meeting on Wednesday, which is the first time Powell has chaired a FOMC meeting
as Fed chairman.
For this rate hike, the market has basically formed a consensus, and the federal funds rate has been raised by 25 basis points as scheduled, with limited
impact on the market.
The risk of the US dollar interest rate hike was basically released, and the US dollar index did not rise but fell, offsetting the slightly improved support of demand
.
Separately, the U.
S.
-China trade war began as scheduled, with the Trump administration announcing on Thursday that it would impose taxes on at least $50 billion of Chinese imports, in addition to imposing restrictions
on technology transfers and acquisitions from China.
This tariff plan is also the result of US Trade Representative Lighthizer's use of "Section 301" to investigate China, and the negative news of the Sino-US trade war hit the metals market, making the market more cautious
.

Market: Market sentiment turned cautious
this week due to concerns about the global trade war and ultra-high domestic inventories.
This week's market supply is more abundant, in the past few days downstream enterprises maintained the operation mode of on-demand procurement, but on Friday due to the sharp fall in aluminum prices, merchants appeared wait-and-see mood, a small number of merchants bargain stockpile, holders maintained stable shipments, market transactions were general
.
In East China, weak fundamentals maintained last week's narrow range in the first few days of this week, but on Friday, affected by the Sino-US trade war, market risk aversion heated up, and aluminum prices fell sharply, hitting the lowest price
since July 2017.
In South China, aluminum prices fell this week, the center of gravity shifted, the demand of downstream enterprises improved slightly, the demand for aluminum ingots increased, the enthusiasm of enterprises to enter the market to stock up was acceptable, and the current price is at a low level, traders are willing to move goods, but due to the increase in demand for aluminum rods by downstream enterprises, the consumption of aluminum ingots is limited
.

In terms of inventory: the trend of London aluminum inventory this week maintained a straight decline, the latest inventory reported 1276375 metric tons, and the total inventory this week decreased by 29,775 metric tons, down about 2.
3%; The total aluminum stock on the Shanghai Futures Exchange this week was 940318 tons, an increase of 6102 tons, or about 0.
65%,
from last week.
From the inventory data, as of March 19, China's aluminum ingot social inventory was 2.
286 million tons, continuing to refresh the historical high, but the growth rate slowed down significantly, which was related to
the buyer's bargain hunting in the previous week.
Recently, China's major warehouse shipments continued to pick up month-on-month, consumption in East China, South China, Henan showed signs of recovery, peak season consumption start is expected to gradually strengthen, but whether it can continue to go to inventory remains to be verified, inventory inflection point confirmation will bring a greater boost
to aluminum market sentiment.

In the future: the current lack of favorable market, Sino-US trade war into the focus of market attention, for the future of China and the United States on counterattack and response measures we do not know, but it is clear that the future will be more products affected, short-term aluminum price trend or still under pressure, in addition, the first quarter is about to end, but under high inventory pressure, aluminum prices are still weak, it is expected that next week aluminum prices will remain in the range of weak
shocks.