Interest rate rise expected to fall, aluminum ingots community continued to decline, aluminum price shock rebound

(1) Supply: According to Esser Consulting, in June, the bidding benchmark price of pre-baked anode of a large aluminum factory in Shandong fell by 300 yuan/ton, the current exchange price is 4225 yuan/ton, and the acceptance price is 4260 yuan/ton.

(2) Demand: In the week ended June 2, leading domestic aluminum downstream processing companies operated 64.1% of capacity, unchanged from the previous week, according to SMM. Week only aluminum cable plate operating rate rose, aluminum plate strip, aluminum profile operating rate by the off-season demand is reduced. After June, the off-season effect gradually appeared, and the orders of each plate showed a downward trend.

(3) Inventory: As of June 1, LME inventory was 578,800 tons, down 0.07,000 tons on a month-on-month basis. The warehouse receipt of the last period was 68,900 tons, the daily decrease was 0.2,700 tons. SMM aluminum ingots warehouse 595,000 tons, down 26,000 tons from 29 days ago.

(4) Valuation: As of June 1, A00 aluminum ingot price premium of 40 yuan, day on month down 20 yuan. The estimated cost of electrolytic aluminum is 16,631 yuan/ton, decreasing by 3 yuan per day compared with the previous month. Ton of aluminum profit 1769 yuan, day – on – month up 113 yuan.

Overall analysis: Overseas, the US ISM manufacturing index for May was 46.9, below expectations of 47, with the price payments index falling to 44.2 from 53.2, the probability of a 25 basis point Fed rate hike in June fell below 50%, rate hike expectations moved back to July, and the dollar index came under pressure to lift aluminum prices. Domestically, the Caixin manufacturing PMI rose 1.4 percentage points to 50.9 in May from April, diverging from the official manufacturing PMI, which is more focused on small and medium-sized enterprises that export, boosting market confidence. In terms of fundamentals, the reduction of oxidation and anode price drives the estimated smelting cost further down, and the cost support continues to weaken. Downstream research shows that the lack of demand in the off-season leads to the decline of orders in each plate. At present, the spot end of the aluminum ingot inventory fell below the 600,000 mark, South China market continued supply shortage situation, even three basis difference at a relatively high, the short-term aluminum price still has strong support. In the medium term, real estate sales end and new construction is weak, smelting cost is also continuing to decline, tons of aluminum profit to expand the difficulty is high, rebound short idea.

Post time: Jun-09-2023