Recent aluminum price trend is strong, take the Shanghai aluminum index contract as an example, since last Thursday recorded three positive lines, yesterday night high 13955 yuan / ton refreshed 11 since the new high, close to the Wansi pass. From the disk last week, short positions were reduced for two days in a row, and 22000 positions were increased on the first day of the week. It can be seen that the recent market confidence in aluminum prices is relatively strong, and the time went back to the beginning of December 2018. At that time, aluminum prices fluctuated around 13700 yuan / tonne. Why is this year different from last year? where does the bullish confidence come from?

The removal of the library continues, and the speed of lowering the library is faster than expected. According to SMM inventory data, the total inventory of aluminum ingots on December 2, 2018 was 1.367 million tons, while on December 2, 2019, aluminum ingot stocks totaled 720000 tons, a further drop of 35000 tons from last Thursday. This shows that the recent inventory stock is down 647000 tons from last year, or nearly 47.33%. Against the backdrop of a sharp drop in inventories, confidence in aluminium prices is stronger than in the same period last year.

In terms of supply, according to SMM production data, electrolytic aluminum production is expected to remain negative at around 1.32 per cent in November from a year earlier. Although new production capacity has increased in places such as Yunnan and Sichuan, it is difficult to affect the overall spot supply in the market for the time being. From the consumption point of view, according to SMM research downstream manufacturers feedback, earlier this year, aluminum plate and strip, aluminum profiles and other downstream processing plants exist customers to grab orders, stock in advance, so November-December early order is better, the operating rate is slightly higher than in October, and these two pieces of market consumption accounted for more than 60% of aluminum downstream consumption.