June 7 Shanghai aluminum afternoon comment

Macro: Biden vowed to give Fed Chairman Powell "space" to let him fight inflation, market risk aversion rebounded, and the dollar stabilized and rebounded; As the epidemic situation in Beijing and Shanghai is coming to an end, Shanghai will cancel the approval system for enterprises to resume work and production from June 1, and at the same time introduce a series of policies to stabilize foreign investment, promote consumption and expand investment
.
The vehicle purchase tax will be halved, and the CAAM expects the increase to exceed 2 million units
.

In terms of fundamentals, inventories due to warehouse events have been greatly degraded, SMM inventory on the 6th reported 874,000 tons, down 08,000 tons from last Thursday; repeated pledge events occurred in domestic aluminum warehouses, there was a crisis of trust in the trade market, the liquidity of aluminum ingots fell sharply, there was a large discount for spot in South China, and a large discount for individual warehouses in East China
.

The overseas Fed's interest rate hike was strongly supported by the Biden administration, the US dollar strengthened again, the domestic epidemic came to an end, the economy recovered, and the policy support was strong; Fundamentally, the impact of the spot trade market is still continuing, and the new and resumed production capacity increased again in June, but the internal and external inventories are low, and the supply concerns of the bulk market still exist
.
It is expected that aluminum prices will maintain a volatile trend
in the near future.