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[SMM aluminum brief review] intra-day aluminum recorded the biggest decline since April. Fundamental support for downside is limited.
Jul 16,2020 18:03CST
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Source:SMM
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SMM, July 16:

The Shanghai Aluminum 2008 contract opened at 14300 yuan / ton in the morning. Within the first hour of trading, short sellers entered the market to break the night sideways situation and release aluminum downside signals. Then the bulls reduced their positions and left the market, and aluminum prices fell all the way, close to 14:30 in the afternoon. It recorded an intraday low of 13960 yuan / ton. It closed at 13970 yuan / ton at the end of the day. The position in 08 contract day decreased by 8419 hands to 129363 hands, and the Shanghai Aluminum Index position decreased by 7090 hands to 399562 hands. The daily K closed at a long negative line, down 3.45%, recording the biggest decline since April. The center of gravity fell below the 10-day moving average, mainly long positions during the day. From a fundamental point of view, the weakening of orders in the aluminum processing industry downstream of electrolytic aluminum and the slowdown in downstream demand reflected by the continuous narrowing of social inventory decline, and other factors restricting aluminum prices to continue to rise were deeply buried in the market in early June. From a macro point of view, most of the recent stock index futures ushered in a decline, the overall macro market sentiment changes, driving the aluminum market for correction. With the continuous rise in aluminum prices, bulls' confidence is weakening, and they are particularly sensitive to the downside signals released by the futures market. Bulls have continuously left the market to avoid risk for three consecutive days. But on the other hand, SMM statistics today electrolytic aluminum social inventory of 708000 tons, is still in a low position, combined with the recent electrolytic aluminum actual transaction situation is tight, it is expected that aluminum prices downside space is limited.

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