Consumption is expected to recover strongly Aluminum market fundamentals remain solid

During the long holiday, the London metal market generally closed down, with London aluminum down 0.
93% from before the holiday, once touching a relative low of $2891.
5 / ton
.
Danlen aluminum stocks fell steadily to 574,000 tons
.
The fundamentals of the overseas aluminum market remained stable
under low inventories.

On the macro front, the FOMC raised the target range for the policy rate federal funds rate from 0.
25% to 0.
50% to 0.
75% to 1.
00%, the first 50 basis point rate hike by the Fed since May 2000 and the first time since 2006 that it raised interest rates at two consecutive meetings, and said that it would start reducing the balance sheet in the next June, initially reducing its bond holdings by up to $47.
5 billion per month, and doubling the ceiling three months later, in line with market expectations
.
In addition, Brazil, Chile and Hong Kong have also raised interest rates
.
The European Union discusses a new round of Russian sanctions: a gradual embargo on Russian crude oil within 6 months and kicking Russia's largest bank out of SWIFT.

The Russia-Ukraine conflict exacerbates inflation risks
.
Interest rate hikes have landed, and systemic risks in financial markets have been suspended, but high inflation, geopolitics and the epidemic in China continue to put pressure
on the macro environment.

In terms of domestic demand, affected by the epidemic, aluminum downstream production enterprises and consumption areas were significantly disrupted in March
.
Lockdown measures have been adopted in many places in East China, which has a greater impact on the material transportation of local enterprises, the transportation capacity of raw materials and products has declined, and the arrival of goods in Shanghai, Wuxi, Guangdong and other places where the mainstream consumption of domestic aluminum downstream has decreased
.

In terms of inventory, aluminum ingots at home and abroad showed a slight downward trend
.
LME ingot stocks fell slightly by the end of April and have now fallen to 574,000 tonnes
.
Domestically, at the end of April, the inventory of aluminum ingots in the previous period was 160,000 tons, and the social inventory of domestic aluminum ingots was about 1.
017 million tons, continuing to destock.

In April, China was significantly affected by the epidemic, and there was a backlog of aluminum ingots in the southwest and northwest regions, and there were still interference
in transportation and downstream resumption of work.
With the gradual and effective control of the domestic epidemic in May, suppressed downstream demand may gradually recover, and it is expected that aluminum ingot stocks will continue the trend
of decomposition.

Looking ahead, it is expected that the domestic supply of electrolytic aluminum will maintain growth in May, and transportation will gradually return to normal
.
On the demand side, with the gradual control of the epidemic, downstream construction in East China, South China and other places will maintain a recovery, and downstream consumption is expected to recover
strongly.
On the whole, as the interference factors weaken, the delayed consumption season may support the strong operation
of aluminum prices.