[SMM Analysis] since yesterday's surge, how long can this round of aluminum price rise last?

According to the news broadcast yesterday, the leaders of China and the United States exchanged phone calls, and US President Donald Trump said he looked forward to meeting again on the sidelines of the G20 leaders' summit in Osaka. As soon as the news came out of the metal market, both inside and outside the metal market turned red, Lun Aluminum rose nearly 1.6% to close at US $1778 / ton, Shanghai Aluminium rose nearly 0.6%, and closed at 13875 yuan / ton at night. Many practitioners in the industry have wondered whether Shanghai Aluminum has since opened the way up and returned to the above four levels. Through analysis, the author thinks that this statement is too early.

The improvement of the macro atmosphere has indeed promoted the return of aluminum prices, but from the bottom Shanghai aluminum day K line trend chart, the upper daily average is still layer by layer hindrance, and the news surface factors belong to short-term stimulus, the market can be digested in a short period of time, when the market focus skipped the news, the factors that determine the aluminum price will return to the fundamental situation again.

Shanghai Aluminum main Company 1908 contract Operation Day K Line

According to SMM research, there are some electrolytic aluminum plants in the second and third quarter of the new production capacity built or put into production, such as Shanxi Zhongrun, hundred mining Tianlin and 100 mining Debao and other aluminum plants, in addition, part of the downstream feedback to SMM, June downstream orders gradually weakened, SMM is expected to advance to July / August, aluminum profiles, aluminum plate belt and recycled aluminum industry will be more and more obvious. At the cost end, the price of alumina in some areas quoted by the SMM website has dropped to less than 3000 yuan / ton, and has dropped nearly 200 yuan / ton in the past month. If you put in the full cost calculation of electrolytic aluminum, the cost of aluminum ingots has been reduced by 300 yuan to 400 yuan / ton, and in the long run, alumina still has some downward space, so it is difficult to provide support for the uplink of aluminum prices. It can be seen from the supply and demand and cost point of view, aluminum prices are difficult to get upward momentum. Now the only performance is the continuous decline in electrolytic aluminum stocks, but from the SMM statistics of the national inventory data, the recent inventory decline compared with the previous period has narrowed.

Therefore, SMM believes that the Shanghai aluminum uplink space is limited, there is greater pressure to return to the four gates, the rising trend is difficult to continue for a long time.