Non-ferrous metals fell as a whole, and aluminum prices were sideways

Industry News:

1.
Guangxi Baikuang Aluminum Industry Co.
, Ltd.
, a major electrolytic aluminum producer in southwest China, is looking for high-quality alumina to produce high-purity electrolytic aluminum
.
They installed 30 segregation furnaces a year ago, with an annual production capacity of 10,000 tons
of high-purity electrolytic aluminum.
Next year they will try trial production
using alumina imported from Australia.

2.
Emirates Global Aluminium (EGA) announced on December 23 that the Al Taweelah alumina refinery has produced 1 million tons of alumina since it began operations in April, and it is now expected to reach full capacity in
the first half of 2020.
Once fully operational, the Al Taweelah alumina refinery is expected to produce around 2 million tonnes of alumina per year, enough to meet 40% of EGA's
alumina demand.
In addition, EGA began exporting bauxite from its subsidiary Guinea Alumina in August
.

3.
The Jiaozuo Environmental Protection Office announced that the orange warning for heavily polluted weather will be fully upgraded to a red warning from 18:00 on December 23, and the proportion of pollutant emission reduction is mandatory to reach more than
30%.
Jiaozuo local aluminum rod enterprises have responded that all production
has been stopped.

In terms of the market, the spot market in the morning was once active, with strong willingness of holders to raise prices, low recognition of high prices by middlemen, and a small amount of downstream purchases
.
The mainstream trading price in Shanghai is around 14480 yuan / ton, which is about 130 premiums compared with futures
.
The mainstream transaction price in Guangdong is around 14540 yuan / ton
.
Due to the low arrival, spot supply is still tight, inventories have fallen to very low levels, and macro expectations are still somewhat supportive
of short-term prices.
However, with the end of the rush, the downstream start will gradually decline in the later period, which will have a restraining effect
on the price.
It is not recommended to chase long operation, you can try to buy near and sell long strategy
.

Yesterday's intraday night trading volatility rose, the main contract closed at 14245, the contract structure continued near high and far low
.
From a fundamental point of view, the destocking of aluminum ingots and aluminum rods this week is still continuing, the outbound volume continues to be higher than the same period of previous years, the short-term fundamentals are strong, and the overseas LME has written off warehouse receipts for several consecutive days, which has boosted the price strengthening
.
However, in the medium and long term, the destocking of aluminum ingots is expected to gradually end at the end of this month, the Spring Festival accumulation is about to begin, next year electrolytic aluminum is planned to put into production capacity is huge, and the raw material end oversupply cost is weak, electrolytic aluminum profit scale continues to expand, supporting the production of new production capacity
.
We maintain our bearish view on the far month, pay attention to the inflection point of accumulation, and recommend gradually opening a long position in the far month at the high
.