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Shanghai Aluminum Fell Sharply, and Japanese Inventories Increased

February 03 2021 08:53:13     Ruida Futures (Linda)

Internal and external trends:

LME aluminum continued to fall on Tuesday. As of 15:00 Beijing time, 3-month LME aluminum reported US$1,961.5/ton, a daily increase of 0.05%. Shanghai Aluminum's main 2103 contract fell sharply, with a daily maximum of 15,290 yuan/ton, a minimum of 14,895 yuan/ton, and a closing price of 14,845 yuan/ton, down 2.06% from the closing price of the previous trading day; trading volume was 201240 lots, a daily decrease of 46238 lots; positions held 165,232 Hands, a daily reduction of 8815 hands. The basis difference is 245 yuan/ton; the monthly price difference of Shanghai Aluminum 2103-2104 is 25 yuan/ton.

Market focus:

(1) The US Treasury Department expects to borrow US$274 billion from January to March, which is approximately US$853 billion less than the US Treasury Department’s forecast in November, when it was expected to be US$1.127 trillion. (2) The U.S. Congressional Budget Office predicts that the real GDP will shrink by 2.5% in 2020 and that the real GDP of the United States will grow by 3.7% in 2021. The unemployment rate is expected to be 6.8% in 2020, 5.3% in 2021, and 4.9% in 2022. (3) According to Marubeni Corporation's data, at the end of December 2020, aluminum inventories in Japan's three major ports increased by 5.1% from the previous month to 266,900 tons, and the inventory at the end of November was 254,000 tons.

Spot analysis:

On February 2, spot A00 aluminum was quoted at RMB 15,170-15210/ton, with an average price of RMB 15,190/ton, and a daily drop of RMB 40/ton. The Yangtze River Nonferrous Metals reported that the circulation of goods is sufficient, traders tend to wait and see, the enthusiasm of large buyers to receive goods is average, and the transaction activity is weak.

Warehouse receipt inventory:

On Tuesday, Shanghai aluminum warehouse receipts totaled 82,931 tons, a daily decrease of 150 tons; on February 1, LME aluminum inventory was 1,428,175 tons, a daily decrease of 2,875 tons.

Main positions:

Shanghai Aluminum's main 2103 contract top 20 long positions were 93,562 hands, a daily decrease of 5,952 hands, a short position of 116,355 hands, a daily decrease of 6313 hands, a net short position of 22,793 hands, a daily decrease of 361 hands, both long and short positions, and a decrease in headroom.

Market research and judgment:

Shanghai Aluminum 2103 fell sharply on February 2. The US Treasury's quarterly financing plan cuts more than expected, and the US economic growth this year is expected to reach 3.7%, making the US dollar more attractive and the US dollar index continues to rise. The import arbitrage window has been closed recently to curb the inflow of overseas sources. However, aluminum inventories in Japan’s three major ports have rebounded in December, indicating that supply pressure has increased; and the high profits of domestic electrolytic aluminum have stimulated the release of production capacity, and the market has ample supply. In addition, the downstream stocking has basically ended at the end of the year, and the demand has gradually weakened. Above aluminum prices face resistance. Technically, Shanghai Aluminum's main 2103 contract shrinks to lighten up and take back gains, pay attention to the 14750 position support, and is expected to adjust in the short-term range. In terms of operation, it is recommended to operate in the range of 14750-15200 yuan/ton with a stop loss of 150 yuan/ton each.

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