[SMM analysis] A small increase in inventory, a negative drop in wages, and a relatively low market for aluminum bars.

SMM, July 24th:

This week, the aluminum bar market is relatively depressed: the weekly increase of the main contract of Shanghai aluminum futures is close to 300 yuan / ton, while the spot price of aluminum ingot is slightly less than 200 yuan / ton; the processing fees of Guangdong and Wuxi have dropped slightly, falling by 20 yuan / ton.

The inventory of aluminum bars in China's major consumer places on Thursday was 68600 tons, an increase of 3600 tons over last Thursday. Stocks in Foshan, Wuxi, Huzhou and Nanchang all increased to varying degrees, with only a slight decline in Changzhou inventory and a slight decline in the superimposed delivery of goods. The main increments are concentrated in Huzhou and Nanchang, while the processing fees in both places are relatively low, and the mainstream quotation is less than 300 yuan / ton. The processing fee in Wuxi area is also less than 300 yuan / ton, and the low transaction price is close to 200 yuan / ton in the week; the processing fee in Guangdong area is slightly higher, and affected by the upside-down price difference between Guangdong and Shanghai and the price of the holder, the center of gravity of the processing fee remains above 400 yuan / ton during the week. there are a small number of cheap aluminum rods below 400 yuan / ton.

During the week, Guangdong added new aluminum bars to Hong Kong, mostly from Shandong and Inner Mongolia, and the transportation time varies from 10 to 20 days, which is relatively long. In addition, the supply of automobiles from the southwest is still pouring into the Guangdong market. It is worth noting that on Tuesday, Xinjiang Railway Bureau adjusted the freight adjustment sent to various bureaus, and there was still a considerable downward proportion of railway transportation costs to Zhengzhou Bureau and Shanghai Bureau. From the point of view of freight, Nanchang Bureau and Guangzhou Bureau were significantly less attractive. However, the Henan aluminum bar market is relatively small, and Xinjiang aluminum bars will be more likely to be sent to Jiangsu, Zhejiang and Shanghai under the Shanghai Bureau in the short term.

Generally speaking, the aluminum bar market in July has fully entered the summer off-season mode. Although the inventory has not obviously accumulated, the overall supply of goods in circulation is abundant, there are more on-demand purchases downstream, and the aluminum bars are more inclined to be distributed to the factory. As a result, the performance of self-picked up aluminum bars in the warehouse is not good. In the short term, the processing fee will remain relatively weak, and the rate of price adjustment depends on the shipper's willingness to ship and the fluctuation of the base price.

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