Rusal Sanctions News Stimulate The Market

Last night, Lun Aluminium rose by US$97 to US$2,232. The US dollar index fell from the previous high of 114 to around 111. The Shanghai Aluminium 2211 contract rose by 270 yuan to 18,240 yuan / ton, and once surged to 18,525 yuan / ton in night trading.

There are two main reasons for the sharp rise in aluminum prices. One is that the discussion on banning the trading of Rusal aluminum ingots on the LME has made the LME aluminum prices soar. The devaluation panic was suppressed, and the US dollar index fell sharply, which relieved the external metal. 

Although the restrictive factors for Rusal aluminum ingots are only discussed at present, and everything is uncertain, on the one hand, because of the fact that the LME price fell sharply before, there was a factor that Rusal planned to deliver the LME position, so after the reversal of things, the emotional impact was intense; On the other hand, the bulls lacked effective event stimulus, and they have been suffering for a long time, and the LME aluminum price even once fell to the vicinity of the cost line of Rusal, and the social inventory of the whole society was low, and the downside was limited.

It is reported that on the basis of the production reduction in Yunnan, an aluminum plant in Guangxi was forced to suspend production due to low aluminum prices and high costs. In terms of energy costs, hydropower is still tight at present, and the market coal price has weakened slightly before the holiday, with 5,500 kcal stable at 1,500 yuan. / ton or more; in terms of social inventory, on Thursday, the inventory of aluminum ingots went from 35,000 tons to 612,000 tons, and aluminum bars went from 14,500 tons to 97,000 tons. The downstream demand performance is very good; in terms of spot transactions, aluminum ingots are highly motivated to dump goods before the festival, and the demand is acceptable.