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profitable:

1. The upstream bauxite supply continues to be tight, and the alumina cost support is obvious. At present, the supply and demand of thermal coal are booming, and the cost of electricity will not drop in the short term. At the same time, the price of prebaked anodes fluctuated at a high level. Therefore, the current cost of electrolytic aluminum has obvious support, and the room for aluminum prices to fall is relatively limited.

2. With the fall in aluminum prices, the willingness to purchase downstream has slightly rebounded, driving inventory to be depleted again, and consumption has not declined significantly for the time being. Affected by the high temperature weather in Sichuan, the aluminum plant has reduced production slightly in order to reduce the load, involving a production capacity of 75,000 tons.

Bad:

1. The pressure on the supply side is still slowly increasing, and low-cost Gansu, Yunnan and other regions have steadily put into production. It is expected that the domestic electrolytic aluminum operating capacity will reach 41.4 million tons by the end of July, and the output in July is expected to reach 3.48 million tons, a year-on-year increase of 6.2%.

2. This week, the operating rate of leading domestic aluminum downstream processing enterprises was 66.3%, the same as last week. Among them, the operating rate of aluminum profiles rose slightly by 0.1%, and the consumption performance of building profiles was still weak. There are few new orders for aluminum cable companies, and the operating rate of the primary and recycled alloy sectors continues to operate at a low level. From July to August, the demand for traditional consumption in the off-season is unlikely to improve significantly.

Summary: The market mainstream expects the Fed to raise interest rates by 75 BP in June, and commodity prices have already priced in this expectation, and the short-term macro sentiment has stabilized. From the fundamental point of view, the supply of upstream bauxite continues to be tight, and the cost of electrolytic aluminum is obviously supported. The pressure on the supply side is still being released, but the aluminum factories in a very small number of areas are affected by the high temperature and have reduced production, and the market's worries about oversupply have been alleviated to a certain extent. The demand side is still in the off-season of consumption, but the decline in the downstream operating rate is not obvious. Considering that it is still in the state of destocking, the short-term aluminum price has limited room for decline, and the probability of wide fluctuations is high.

Operation strategy:

Macro sentiment improved slightly, with weak fundamentals. It is expected that the 09 contract will fluctuate in the range of 17800-18500 yuan / ton next week, and it is recommended to sell high and buy low within the operating range.