Aluminum prices moved down on July 5th

According to the Commodity Market Analysis System of SunSirs, on July 5, 2023, the average price of domestic aluminum ingots in the East China market was 18,326.67 RMB/ton, a daily decrease of 1.22%.

In the long term, the price was in the sideways range after declining from a high level, and had been fluctuating in the range of 17,500 to 19,500 RMB/ton.

Overview of Fundamentals

Supply side: During the rainy season in the southwest region, with the lifting of power load restrictions in Yunnan, it is expected that there will be a production capacity of 1 to 1.3 million tons to resume production, and there is an expected increase in domestic electrolytic aluminum supply; At the same time, there is news of a production reduction in Shandong. Overall, there is an expected increase in the supply of electrolytic aluminum in China.

On the demand side: The weekly operating rate of downstream processing enterprises is expected to decrease month on month, and there may be no significant improvement near the off-season in the future. The terminal real estate overall is still weak, however, there is support from the completion end in the short term, with weak data on new construction projects, and stronger demand for aluminum downstream in the short term than in the long term. Pay attention to the growth of new energy vehicles, photovoltaic, and ultra-high voltage industries in the later stage.

In July, the aluminum price may be sideways around the line of 18,000 RMB/ton

Aluminum ingot inventory is still at a historical low level, and Yunnan production is expected to release. From a cost perspective, in terms of alumina, due to the resumption of electrolytic aluminum production capacity in Yunnan and the news that local alumina production capacity will be reduced due to mine reclamation in Henan, the short-term volatility of alumina prices is stronger, and the cost support is slightly strengthened. Short-term supply pressure may become prominent at the end of July, and it is expected that the social inventory of aluminum ingots will accumulate in July. In the short term, aluminum prices will move sideways around the 18,000 RMB/ton.

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