China and the US weak economic data renewed investors’ concerns about the global economy. Chinese aluminum and Russia reached an agreement to reduce aluminum production, but if the league had no industry collective prop up the market, aluminum prices will not be stable easily.
1, the global economic growth and deflation deep mud among US economic growth momentum weakened, interest rates during the year hopeless, recovery of the European economy hovering on the edge of struggle, ready to expand QE, Japan once again into recession channel, the Chinese economy downward pressure yet effective relief, the government will continue to implement a more accommodative monetary policy, a more active fiscal policy.
2, since the fourth quarter of 2014, the Chinese government’s policy tone has not changed, but the intensity of policy easing significantly strengthened, November 21 rate cut, February 4, 2015 a comprehensive RRR, Feb. 28 to cut interest rates again, April 19 day drop quasi one percentage point. April 30 Politburo meeting set the tone for steady growth. From August 26, 2015, lowered the benchmark lending rates and lower deposit reserve ratio by 0.25 percentage points; since September 6, down financial institutions RMB deposit reserve ratio by 0.5 percentage points. From October 1, the abolition of the proportion of loans and deposits of commercial banks do not exceed 75% of the regulatory “red line.” From October 10 (city) promotion of credit assets pledged in Shanghai, Tianjin, Liaoning, Jiangsu, Hubei, Sichuan, Shaanxi, Beijing, Chongqing and other nine provinces refinancing pilot.
3, Alcoa announced that it will in the fourth quarter to the first quarter of next year and cut production capacity 503,000 tons of primary aluminum smelting and alumina refining capacity of 1.2 million tons l US October ISM non-manufacturing PMI significantly better than expected ADP employment l October than-expected non-farm payrolls increased 182,000, or to the good l hint Eurozone composite PMI-than-expected October business expansion rate is still moderate l United States in October manufacturing index from 50.2% in September fell slightly to 50.1 percent, a record low of 2 years l Eurozone October manufacturing PMI final value of 52.3, higher than the previous value and the expected 52l US October University of Michigan consumer confidence index is less than expected l GDP growth slowed to 1.5 percent in the third quarter than-expected US October l eurozone economy climate index rose to 105.9 hit the highest level in more than four years
4, pre-aluminum (9685, -140.00, -1.42%) price rebound is mainly limited by the supply, causing China policy and post steady growth policy efforts may raise the expectations. Recently finished lower aluminum prices largely steady growth and changes in the expected Fed rate hike is expected to lead to changes in common. Policies delay in landing, has failed to effectively alleviate overcapacity, weak aluminum downstream demand.
5, November 23 News: Shanghai aluminum futures traded month around 9900 yuan / ton mark integer to start before noon-day moving average price is running under. Today, Shanghai spot transactions prices concentrated in 9770-9780 yuan / ton, premium 120-100 yuan / ton, Wuxi transaction prices concentrated in 9760-9780 yuan / ton, Hangzhou turnover 9770-9790 yuan / ton. Morning disk turnover continued down the center of gravity, East offer relatively low, then the disk rose slightly, holding cargo ship to raise prices, the market focused on a large number of quotations in 9780 yuan / ton, but volume was light, the lower the market will accept the goods, did not appear very price will, weekly downstream to maintain demand procurement, today East overall turnover in general, probably will expand cash discount.
Futures: Shanghai aluminum 1601 contract opened at 9830 yuan / ton, after hitting an intraday dropping opening brief lowest point 9750 yuan / ton, turnover rebounded center of gravity, the price of around 9,830 yuan / ton in the vicinity within a narrow range, then suffered a few short throw pressure, the price fell slightly, but then a lot of short positions which were re-pushed to 9830 yuan / ton in the vicinity finishing, printing afternoon came news cut aluminum prices, continued strong risk aversion short departure promote aluminum prices hit an intraday high 9910 yuan / ton, the end plate to close at 9870 yuan / ton, the Shanghai aluminum 1601 contract volume decreased 88,228 lots to 988,088 hand positions to reduce the 13,498 lots to 208,330 hand, continued pressure 5 day moving average, Shanghai aluminum index positions to reduce 10458 lots to 745,270 hand, focus on continuous outflow of speculative funds and the market short cuts continue to release news of impetus for aluminum.
Medium and long term, China has promulgated more aggressive policy of steady growth, lower demand for aluminum is expected to slowly improve, aluminum prices are more likely to usher in a rebound stage.