The short-term trend of aluminum prices is mainly high volatility

On the macro front, the domestic epidemic is severe, Shanghai continues to be locked, the impact on the economy and demand has expanded, and economic data is expected to weaken in April, putting pressure on the market
.
Overseas, the Bucha incident intensified, and Europe and the United States expelled Russian diplomats
.
The ISM non-manufacturing index in the United States in March was 58.
3, less than expected, and the final value of the Markit services PMI in March was 58, expected to be 58.
9, and the price sub-item continued to rise, and high inflationary pressure was difficult to effectively alleviate
.

In terms of the market, enterprises in Shanghai stopped production and stagnation, and the consumption of aluminum profiles stagnated
.
Most enterprises in Jiangsu have normal production, and a few enterprises have affected the production of working from home, but they are also facing transportation difficulties
.
The production of the surveyed enterprises in Zhejiang was basically not affected, but the logistics were also hindered
.
If the epidemic continues to be high, the traditional consumption season will face further delays
.
In addition, logistics also affects raw material procurement, and small enterprises may face further pressure to reduce production
.

On the supply side, the epidemic has not yet significantly affected the production of enterprises, and high profits have accelerated the pace
of resumption of production of electrolytic aluminum plants.
More than 1.
2 million mt/year of aluminium smelting capacity has been restarted since February 2022, and the ingots are expected to enter the market
in Q2.
According to the latest developments in Yunnan and Gansu, the aluminum smelting capacity will be increased by another 1.
5 million tons/year
by the end of June.
In terms of production capacity, CRU data shows that the operating capacity in February was 38.
6 million tons/year, and it will reach 41 million tons/year
in the second quarter.

In terms of inventories, LME stocks continued to fall to 623,000 tonnes, continuing to hit their lowest level
since 2006.
The trade premium between Europe and the United States continues to rise, supply concerns linger, and very low European inventories will continue to support LME aluminum price solidity
.
In terms of social treasury, the survey shows that since March 31, other warehouses in Wuxi except for China Reserve have been unable to pick up goods
.
In terms of data, statistics show that by March 28, compared with March 10, the social inventory of electrolytic aluminum fell by 100,000 tons
.
In terms of regions, Shanghai: down 12,000 tons, Wuxi increased by 17,000 tons, Foshan fell by 48,000 tons, and Gongyi fell by 34,000 tons
.
The decline in inventories was mainly concentrated in Foshan and Gongyi areas
.
The new crown pneumonia epidemic has affected the shipment of aluminum ingots to the central and eastern regions of China and the outbound shipments
in the eastern region.

The current situation in Russia and Ukraine is still uncertain, the United States and Europe sanctions against Russia, and Russia's counter-sanctions, overseas electrolytic aluminum, energy supply disturbance will be more durable, LME aluminum absolute low inventory still maintain a significant dematerialization to provide price support
.
Domestically, the epidemic has impacted domestic aluminum supply and demand, market demand is weak, the discount is large, the arrival of goods is gradually recovering, and the destocking is slowing down
.
The short-term Shanghai aluminum high volatility operation, showing a market that is easy to rise and difficult to fall
.