May 31 Shanghai aluminum brief comment

Recently, affected by Biden's policy of 6 trillion stimulus plan, market confidence has increased significantly, coupled with low inventories and narrowing production capacity during the year to form a certain support for prices, aluminum prices are difficult to fall, and even soared for a while; In the short term, Shanghai aluminum may have a trend of volatility and stabilization, but it is still necessary to pay attention to the next national policy plan and whether there is a possibility of selling reserves again; It is recommended to cautiously chase the rise, the main force above the focus on the 19,000 pressure level, the operation of a small amount of replenishment or wait and see, it is expected that tomorrow's spot aluminum shock will stabilize
.

Fundamentally, on the one hand, due to the upgrade of power cuts in Yunnan, the power load of Yunnan electrolytic aluminum plant has been reduced by more than 30%, which is expected to last until mid-June, and the production reduction or impact on the output is between 100,000 and 190,000 tons, and the suspended production capacity will be restored in July at the earliest; The consumption season at the end of May is still being fulfilled, although some enterprises of building profiles have been affected by power cuts, and the operating rate has fallen slightly, but the short-term demand for construction and photovoltaic industry profiles in the future is generally good
.
Overall, the short-term supply-side disturbance superimposed on the peak season blessing, the destocking cycle is expected to be extended, and it is expected that the domestic electrolytic aluminum social inventory will continue to decline to give some support
to aluminum prices.