Mid-term Jiahe: London aluminum shocks higher

Last Friday, the price of Aluminium rose by 18 US dollars, to close at 1948 US dollars. The trading volume of aluminum on the floor was 12,863 lots, and the market was relatively active. Investors’ confidence in the aluminum market has increased. In addition, the spread of spot/three-month aluminum has shifted from a 15 dollar counter early spread last week to a positive US$3 spread. The tight supply situation has improved. At the same time, in terms of LME inventory, aluminum inventories increased by 675 tons last Friday and total inventory was 499,350 tons. For the current global aluminum market, spot companies are still optimistic. An Australian official stated that “already 10 companies have participated in bidding for the country’s bauxite mine in Queensland. It includes most of the aluminum companies and overseas companies.” Brazil, the world’s sixth largest aluminum producer, has 9 Monthly primary aluminum production also rose by 4.8% year-on-year, and production reached 126,300 tons. From the above situation, we can clearly feel that the spot companies on the market are full of confidence in the prospects of the aluminum market.

Judging from the domestic situation, domestic spot companies have not changed their optimism about the future market. Xiao Yaqing, general manager of Chinalco Group, once stated that “Although many raw materials industries including steel have experienced surpluses, domestic demand for aluminum continues to grow.” On the one hand, the domestic market continues to increase demand for aluminum; On the other hand, power shortages and rising energy prices are also increasing aluminum production costs. In addition, the aluminum prices raised by China Aluminum in mid-October also increased the production costs of aluminum. All these factors will provide a strong support for the futures price. By observing current positions in the Shanghai aluminum market, we have found that the holding positions are increasing, which is undoubtedly good news for Shanghai Aluminum, which lacks liquidity. In general, the increase in domestic demand, the increase in aluminum production costs, and the increase in positions will push the Shanghai aluminum market into a relatively active pattern.

Today, Shanghai Aluminum's main 0601 contract opened at 17,160 yuan, with a higher price of 17,370 yuan and a lower price of 17,160 yuan, closing at 17,360 yuan. A total of 21040 lots were traded throughout the day, and the trading volume was significantly enlarged. The market was actively trading.

Operation: more than one month to continue holding. (Zhao Wei)