July 20 Shanghai aluminum brief comment

This week's data, aluminum ingots, aluminum rods out of the warehouse is still good, but based on the downstream operating rate has not recovered, orders have not heard of significant improvement, so the short-term improvement of downstream procurement can form a temporary support for aluminum prices, but if the macro environment turns sharply again, the industry will be difficult to match macro pessimistic expectations
.
On the supply side, the resumption of production in Gansu and Guangxi is still in progress, but low aluminum prices threaten the economic benefits of resuming production, or delay the progress of production increase
.
However, in terms of costs, there are concerns about the weakening of the market, and if coal prices fall as expected by then, the cost collapse will further drag aluminum prices down
.

From a macro perspective, due to the pessimistic expectations of excessive consumption in the early market, although the news is still bearish, but the short-term actual negative impact on the market has been relatively limited, many varieties or ushered in a short repair rebound before the interest rate hike, Shanghai aluminum is expected to continue to break through the 18,000 pressure level in recent days, and the upper high point looks at 18,400; however, in terms of the overall trend of the month, we believe that the aluminum price after the low rebound still has the possibility of falling again, it is recommended to raise interest rates before stabilizing on demand stocks, and spot aluminum is expected to continue to operate at a high level
。