It is expected that LME three-month aluminum will operate at high levels in the future

After hitting a high of US$1951.5, LME aluminum fell back under the profit-taking pressure. LME three-month aluminum fell to US$1,863 last week; due to increased supply and low consumption, domestic aluminum The market still fluctuates around a narrow range of 16,500 yuan. The focus of the international market remains on the rise in oil prices. International oil prices continue to hit new highs. At present, the price of New York crude oil has approached 68 US dollars. Rato, executive director of the International Monetary Fund (IMF), warned on Thursday that the wheel of Asian economic growth may be derailed by high oil prices. In July, although US home sales fell by 2.6% compared to June, it still increased by 4.7% year-on-year, indicating that the construction market has maintained its main driver of economic development. According to the International Aluminium Association, in July this year, the North American aluminum rolled product orders index (excluding cans) decreased by 9.3% year-on-year, but in the first five months of this year, North American aluminum rolled product shipments continued to rise. momentum. August still belongs to the traditional off-season consumption season. The aluminum market is calm. Due to the abundant supply of primary aluminum and aluminum scrap, the original aluminum spot premium in the northwestern United States fell to a 20-month low of 4 cents/lb. Similarly, Japanese aluminum purchasers also demanded a reduction in the aluminum premium in the fourth quarter. Japanese buyers demanded that the premium for CIF aluminum ingots arriving in Japan in the fourth quarter be reduced from US$70-72/ton in the third quarter to US$60-65/ton. Due to the good consumer demand in the global aluminum market, Dubai Aluminum has increased its annual aluminum production capacity to more than 900,000 tons by installing new equipment. At the same time, Alcoa stated that it will open an idle electrolytic aluminum plant in Ghana in the first half of next year and plan to expand electrolytic aluminum investment in Brazil. In the domestic market, as the supply of aluminum ingots continues to grow, downstream consumer companies are underemployed and the aluminum market continues to maintain a weak market consolidation pattern. According to the newer statistics released by the Shanghai Futures Exchange, aluminum ingot stocks at delivery warehouses in the South China Sea area rose to 24,366 tons last week, an increase of 5,804 tons from the previous week, and aluminum ingots in Shanghai remained above 30,000 tons. Influenced by the increase in inventories, the spot aluminium price in the domestic large aluminum ingot consumption area in Nanhai, Guangdong, has been declining from the previous period of 16,650 yuan. It fell below 16,500 yuan last week, forming a premium market with the Shanghai region, and hitting market sentiment severely. As domestic electrolytic aluminum production capacity growth has not stopped, alumina supply is extremely tight, and port import prices have risen to around 5,000 yuan/ton again. According to customs report data, from January to July, domestic primary aluminum production increased by 18% to 4.1 million tons. In July, due to the cancellation of the alumina processing trade policy, the import alumina volume began to slow down, which was only 1.9% higher than the same period of last year, to 532,673 tons. From January to July, the primary aluminum exports increased by 38% to 815,049 tons. With the arrival of September, the international and domestic aluminum market will usher in the peak season of consumption. It is expected that the three-month aluminum future of LME will operate around the high level of US$1,850-1950. The firmness of international prices will certainly attract domestic aluminum producers to continue exporting aluminum ingots to ease the pressure on domestic aluminum ingot supply. Although there is a large inventories in the domestic aluminum market, aluminum prices will face some pressure. However, due to the high production costs of electrolytic aluminum plants, there is limited space for aluminum prices to fall. After the domestic consumer market has become prosperous, Shanghai Aluminum is expected to go out of the trough and rise toward the target of 16,800 yuan/ton.