[SMM brief Review] low inventory + higher-than-expected consumption aluminum prices are difficult to be dragged down by the off-season effect.

SMM7 March 23: recently, due to the influence of relevant news from the Chinese and US embassies, the tendency of market venture capital has converged, and the non-ferrous metal futures market has generally fallen, while Shanghai Aluminum has outperformed itself. At the end of the day, the Shanghai Aluminum 2008 contract rose 0.03% to 14395 yuan / ton.

Last week, due to the across-the-board correction of the non-ferrous sector, coupled with the market expectation of the arrival of the traditional off-season in the aluminum industry, aluminum futures fell in a row. After rushing high and falling back, aluminum rose again this week.

On the one hand, the upward momentum comes from macro factors, with loose economic policies and abundant funds; and with the increase in domestic consumption, the upper echelons began to emphasize internal circulation as the primary goal.

Fundamentals, downstream demand is higher than expected, to profile-based enterprise orders are still relatively abundant. And the current inventory is still low, and the latest data show that inventory continued to decline on July 23, SMM statistics domestic electrolytic aluminum social inventory weekly to 6000 tons to 702000 tons, aluminum prices still maintain a strong trend.

On the whole, aluminum prices are still supported by fundamentals, and it is expected that aluminum prices will fall less in the short term in the future. As for the nodes that open the downward channel of aluminum prices, they mainly focus on three factors, namely, the inflection point of absolute inventory, the continuous discount on spot and the occurrence of substantially exceeding the average profit.

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