The aluminum price fluctuated widely

According to the data of Business News Agency, the average price of domestic aluminum ingots in the East China market on February 27, 2023 was 18336.67 yuan/ton, down 0.81% per day, down 3.39% from the aluminum price of 18980 yuan/ton at the beginning of the month (February 1). After the aluminum price recovered in January, the aluminum price fell in mid-February, and the current price is at the lowest level in the month.

In the long term, the current price has retreated significantly, with an increase of 5.08% compared with the average market price of 17450 yuan/ton of aluminum ingot at the beginning of the recent recovery (July 14, 2022). The recent high price of aluminum appeared on December 5, and the average market price of aluminum ingots was 19536.67 yuan/ton, down 6.14%.

Overview of fundamentals

1. Inventory data

As of February 27, the domestic mainstream social inventory was 1.251 million tons, 1.076 million tons compared with the social inventory at the beginning of the month (February 2), and 185000 tons accumulated.

2. Macro pressure

The US PCE data in January performed better than expected, which may push up the expectations of the Federal Reserve for higher terminal interest rates to some extent. The US dollar rose strongly, and non-ferrous commodities were under pressure as a whole. The expectation that the Federal Reserve will increase the tightening force has made the aluminum price downward under pressure.

Aftermarket forecast

On the supply side, the recent production reduction of boots in Yunnan has been implemented, and the production reduction capacity is slightly higher than expected, and the positive expectation in the early stage is gradually digested. From the inventory data, the downstream consumption has improved, the operating rate of processing enterprises has risen significantly, but it is less than expected, the social inventory of electrolytic aluminum has increased slightly, and it is still in the trend of accumulation, and the inventory of downstream aluminum rods is still out of stock. In the short term, electrolytic aluminum will be suppressed by macro factors, and it is expected that the operation will be mainly weak, and the downstream consumption will be seen in the future.