At the beginning of the New Year fell sharply, aluminum prices below the support can hold?
After the New Year’s Day in 2023, the domestic aluminum price fell sharply, after two months again below 18000 yuan / ton line, the lower cost support and technical support can be held?
The macro market has shifted from the policy side to the data side
Reviewing the whole December, with the landing of the Federal Reserve rate hike in December and the convening of the Domestic Central Economic Work Conference, a series of important macro events in the market have been landed and gradually digested by the market. Looking ahead to the beginning of the year, the macro market will shift from the policy end to the macro data side.
Domestically, the domestic manufacturing PMI in December was 47.0%, down 1.0 percentage points from the previous month, the lowest for the year; the non-manufacturing PMI in December was 41.6%, down 5.1 percentage points from the previous month, also hitting a new low for the year. With the increase in the number of infections approaching the Spring Festival holiday, some downstream processing plants even entered the holiday mode ahead of time, resulting in the PMI index hitting a new low, and the upcoming export data for December is not expected to perform too well. Overseas, the latest US non-farm data and CPI data will provide key guidance for the Fed’s first meeting of 2023 at the end of January. For now, the Fed’s January meeting is expected to slow the US labor market further to cool and inflation data to fall due to the Fed’s aggressive interest rate hike policy in 2022. In addition to raising interest rates, the market will be more focused on the recession of the US economic data this year.
Electrolytic aluminum such as aluminium profiles ,aluminium profile for doors and windows , roof rack solar panel (关键词）and so on social inventory into the seasonal accumulation
On January 3,2023, SMM counted the domestic social inventory of electrolytic aluminum by 561,000 tons, an increase of 68,000 tons from last Thursday. During the New Year’s Day holiday, the arrival of electrolytic aluminum increased, and the inventory of aluminum ingots in each region had different degrees, especially the increase in Wuxi. By region, Wuxi area inventory increased by 31,000 tons, the total amount of more than 140,000 tons. The total inventory in Gongyi area increased to about 100,000 tons; the inventory in the South China Sea area increased slightly, and the inventory was still maintained at about 100,000 tons. Shandong area warehouse receipt volume increased, inventory has also increased. The total electrolytic aluminum inventory has increased to 560,000 tons, although it is still low compared with the same period last year, but the month-on-month view, has been 3 consecutive weeks of accumulation, aluminum ingot ingot increase in December and facing the holiday consumption weak accumulation is expected to gradually cash. In terms of the outbound volume, the weekly outbound volume was about 103,800 tons, 12,700 tons lower than the previous month. According to the market feedback, some downstream markets have been on holiday, and it is expected that the market transaction will be more light in the later stage. In terms of aluminum rod, on January 3,2023, SMM statistics, the aluminum rod inventory of domestic mainstream consumption areas was 74,300 tons, compared with 13,400 tons on last Thursday, also in the state of accumulation.
Electrolytic aluminum cost support or some to move down
In terms of electrolytic aluminum cost, alumina prices have rebounded since December; thermal coal price in Inner Mongolia as an example, fell by 50 yuan / ton in December; in December, the purchase benchmark price of pre-baked anode of Shandong large electrolytic aluminum enterprises decreased by 220 yuan / ton month on month. According to Mysteel data, in November 2022, the weighted average full cost of China’s electrolytic aluminum industry was 17,557 yuan / ton, and the profit of the whole industry was 1,173 yuan / ton. In December, it is expected that the comprehensive cost of electrolytic aluminum will move slightly down, aluminum prices this round of decline or will again close to the industry average line.
Short money force or will break below the technical support
From the daily chart of the main contract of Shanghai aluminum, since late July 2022, the price of Shanghai aluminum is basically oscillating between 17,500-19,000 yuan / ton. New Year’s day after the first day of decline, short main funds significantly increased positions, net short head of the net long position advantage further widened. If the subsequent price falls to the position below the daily range, the bears did not significantly reduce their positions or the bulls did not significantly increase their positions, and the probability of aluminum prices further falling below the technical support level gradually increases. Overall, in the recent poor macro data and social inventory large accumulation expectations, aluminum prices are expected to be under pressure. In addition, the current cost support and technical support at the 17500 yuan / ton line, but the current cost support may be further down, and the technical support also faces the risk of being broken; once broken, the next step may test the gains and losses of the 17000 yuan / ton line.
Post time: Jan-10-2023
