Aluminum prices drop to around 19000
Aluminum prices continue to decline. According to the Commodity Market Analysis System of Shengyi Society, the average price of aluminum ingots in the East China market on July 29, 2024 was 19140 yuan/ton, a decrease of 6.16% from the market average price of 20396.67 yuan/ton at the beginning of the month (July 1).
Reasons for the decline
Macro factors: There are signs of a weakening recession in overseas data, and the Federal Reserve’s Beige Book shows that businesses expect future growth to slow down, and the labor market continues to be weak. CME shows that the probability of the Federal Reserve’s descending order in September has increased to 91.9%, and the expectation of a rate cut in July has fallen through. Domestically, the economic data for the second quarter was released, with a GDP of 4.7%, which was lower than expected.
The supply and demand fundamentals are weak, downstream replenishment is falsified, and destocking is not smooth. As of July 29th, the inventory of electrolytic aluminum in major domestic markets was 795000 tons, which is 33000 tons higher than the inventory of 762000 tons on July 1st.
Short term long short game intensifies
At present, the price of aluminum ingots has fallen to near the marginal cost, and the upstream raw material side is tight, which provides some support for the price. In the short term, the long short game is intensifying.
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