Copper and aluminum: China's steady growth hedging risk of non-ferrous copper and aluminum is not easy to sell short [institutional review]

Last Friday, the financial markets of the United States and Britain were closed for the holiday, and the night trading of domestic copper and aluminum futures was firm. Shanghai copper futures Cu2205 closed at 74880 yuan / ton, up 0.44%, while Shanghai aluminum futures Al2206 closed at 21760 yuan / ton, down 0.02%.

Recently, under the influence of factors such as the launch of stimulus measures to stabilize growth in major economies led by China, domestic financial market sentiment has stabilized from panic and anxiety, although the situation in eastern Ukraine may be further escalated. The intensification of the great power game has led to the separation of the financial system and regional trade, exacerbating financial and commodity market fluctuations, but at the same time, overseas stocks of major international basic metals such as copper, aluminum, zinc and nickel are at a dangerous level. Some large international institutions are repeating the "inventory game" in an environment of mismatch between supply and demand and low inventories, forcing the London Metal Exchange to study measures to prevent the extreme situation of zero inventory.

From the point of view of the inventory available to LME, compared with the massive trade volume of non-ferrous metals priced in the global LME market, the current low to dangerous level of inventory is difficult to play the function of "ballast stone" to adjust the balance between supply and demand in the short-term market, which is also an important factor leading to short-term extreme fluctuations in the prices of LME aluminum, nickel, zinc and other varieties in 2022. In view of the increasing abnormal fluctuations in the market since April, it is suggested that non-ferrous processing enterprises should mainly lock in profit hedging, pay attention to capital management and risk control, and make unilateral shorts on non-ferrous metals in the second quarter.