The situation in Russia and Ukraine has been repeated, and the market’s concern about the supply caused by the war has re-emerged. At the weekend, Australia announced a ban on bauxite and alumina exports, according to the United Nations commodity trade statistics database, Russia has not imported bauxite to Australia for 20 years, importing about 1.41 million tons of alumina. According to RUSAL’s 20-year output of electrolytic aluminum, the sanctions may cause a shortage of RUSAL raw materials.
On the domestic side, the signal of the opening of the peak season in the spot market may have appeared, while policy trends have improved demand expectations. According to Shanghai non-ferrous data, aluminum ingots and aluminum rods accelerated last week, and were higher than the same period in previous years. Even if it is affected by the epidemic, under the stimulation of low aluminum prices, aluminum ingots and aluminum rods still maintain destocking, and the weekly destocking of aluminum ingots has increased significantly. However, the impact of the epidemic on transportation still needs continuous attention.
In addition, the content of the meeting of the Financial Commission of the State Council stabilized market sentiment, stabilized the tone of loose monetary and fiscal policies throughout the year, and the Ministry of Finance said that it did not have the conditions to expand the pilot cities of real estate tax reform this year, which also enhanced the market’s confidence in the soft landing of real estate. “Policy bottom” has emerged, it is expected that the demand for aluminum in the construction real estate sector will not collapse, and driven by infrastructure, new energy vehicles and other sectors, the demand for electrolytic aluminum can still be optimistic.
On the whole, based on the country’s annual economic growth target of 5.5%, we believe that there is still room for aluminum prices to rise in the long run, but in the short term, due to the repeated situation in Russia and Ukraine and the impact of the domestic epidemic, or a wide range of shocks. The previous long order is recommended to continue to hold, and every pullback can be lightly positioned to increase the number.