News

Under the pressure of high inflation, the Federal Reserve raised interest rates by 75bp, which is in line with market expectations. At present, the market is still worried that the economy is entering a recession, and downstream demand is slightly bleak; We believe that at present, non-ferrous metals are more affected by the macro level. Although the resumption of work and production is in progress, the boost to demand is limited, and the downstream is mainly on-demand procurement. Therefore, we still maintain the view of weak volatility and central downside.

Supply: domestic electrolytic aluminum enterprises increased steadily during the week. In June, Gansu and other places still have some production capacity to be resumed. The domestic electrolytic aluminum operation capacity is mainly increased. By the end of June, the operation capacity is expected to reach around 40.75 million tons. Demand: during the week, Shanghai returned to work in an all-round way, the downstream consumption in Jiangsu, Zhejiang and Shanghai improved, and the consumption in Gongyi, Zhongyuan was strong. With the impact of the warehouse pledge event, the shipment volume of warehouses increased and the inventory decreased significantly. The downstream demand is underpinned. The data of new energy vehicles in May is still bright, exceeding market expectations. The sales of new energy vehicles in May were +105% year-on-year, and the cumulative sales from January to May were 2.003 million, an increase of 111.2% year-on-year

Inventory: aluminum rods and electrolytic aluminum continue to go to the warehouse. As of June 20, the spot inventory of electrolytic aluminum was 788,000 tons, a decrease of 61,000 tons compared with last week. Wuxi and Foshan continued to go to the warehouse significantly, and the consumption was repaired. The spot inventory of aluminum bars was 131,500 tons, a decrease of 4,000 tons.

On the whole, after June, overseas macro repression, domestic demand is still in the repair stage, and it is expected to maintain a weak and volatile pattern. We expect that the short-term aluminum price will maintain a wide range of volatility, and there is more certainty to short at high prices.