Aluminum prices rise sharply

In July, Shanghai aluminum metal prices fluctuated upward trend, the price center of gravity continued to pull up.At the beginning of the month, the decline in social inventories of electrolytic aluminum continued to narrow, and the market has a strong expectation of weaker consumption, and the low price of aluminum shocks.Consumption did not show significant signs of weakening in mid-month, inventories continued to fall and aluminum prices recovered slightly.At the end of the month, the DOLLAR index plunged and commodity prices generally rebounded following the dovish decision at the Federal Reserve's July meeting.On the news side, the electrolytic aluminum enterprises in Yunnan province are facing production cuts due to limited power supply. The market has increased the expectation of tight supply in the future, and the aluminum price has been greatly pushed up, breaking the pressure level of 20,000 yuan/ton.By the end of July, Shanghai aluminum month rose 6.69 percent

1. International macro: Mutation virus pressure recovery prospects, market risk aversion increased

Risk aversion increased as the spread of a mutant strain of COVID-19 accelerated and weighed on prospects for a global economic recovery.

The U.S. economic recovery remained unchanged, but the Fed's meeting remained dovish and did not signal a clear tapering of its bond purchases.The US Senate has voted to pass an infrastructure bill, but the debt ceiling issue will pose a short-term fiscal headache.

The European Central Bank maintained its dovish stance, revised its inflation target to increase its tolerance for inflation, and entered the implementation phase of the European Recovery Fund plan.

In general, the global economy has been tested by the epidemic again, monetary and fiscal policies remain loose, and the economic recovery has not been hindered for the time being, showing a trend of sustained improvement.

2. Domestic macro: Do a good job in ensuring supply and price stability of bulk commodities, and maintain reasonable and sufficient liquidity in monetary policy

On July 30, the Political Bureau of the CPC Central Committee held a meeting to analyze the current economic situation and make plans for economic work in the second half of the year.The meeting pointed out that the global epidemic is still evolving, the external environment is becoming more complex and severe, and the domestic economic recovery is still unstable and uneven.

We need to make cross-cyclical adjustments to our macro policies, maintain their continuity, stability, and sustainability, and coordinate our macro policies this year and next to keep the economy operating within an appropriate range.

In pursuing a proactive fiscal policy, we need to make our policies more effective, ensure that the bottom line for community-level investment, the issuance of local government bonds, and ensure that budgetary investment and the issuance of local government bonds are properly managed, so that more work will be done in real terms by the end of this year and early next year.

We will follow a prudent monetary policy to maintain reasonably sufficient liquidity and help small and medium-sized enterprises and industries in difficulty continue to recover.We need to increase the autonomy of macro policies and keep the RMB exchange rate basically stable at an appropriate and balanced level.We will ensure stable supply and prices of major commodities.

3. Inventory: The domestic social inventory of electrolytic aluminum reaches 758,000 tons

July 30, domestic electrolytic aluminum inventory: 79,000 tons in Shanghai, 256 tons in Wuxi, 200,000 tons in South China Sea, 87,000 tons in Hangzhou, 56,000 tons in Gongyi, 64,000 tons in Tianjin, 3,000 tons in Chongqing, and 13,000 tons in Linyi. The total inventory of aluminum ingot in consumption areas is 758,000 tons, and 5.1 tons are unloaded weekly.

As of July 30, the total position of the last aluminum 527718 hands, compared with 440821 last month, 86897 hands, July aluminum price shock is strong, the total position of aluminum increased significantly, mainly to long increased positions.