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Will Recent Rally Sustain After SHFE Aluminum Recorded Five Consecutive Days of Gains?
2022-5-17
With the introduction of favourable national policies and improvement of pandemic in Shanghai, market confidence has recovered, which coupled with falling domestic aluminium inventories, allowed SHFE aluminium to record five consecutive days of gains.
Macro front
On May 15, Shanghai held the 184th press conference on the prevention and control of COVID-19, and said that the resumption of business will be promoted in stages from May 16.
The PBOC and the China Banking and Insurance Regulatory Commission jointly issued the Notice on Adjustment of Differential Housing Credit Policies on May 15. It shows that for households who take loans to buy ordinary self-owned houses, the lower limit of the commercial personal housing loan interest rate for first time home buyers is adjusted to not lower than 20 basis points below LPR of the corresponding term.
Fundamentals:
The aluminium ingot social inventories across China’s eight major markets totalled 984,000 mt as of May 16, down 19,000 mt from a week ago and 77,000 mt lower than a year ago. This also marked a monthly drop of 55,000 mt.
The domestic pandemic is gradually under control, and its negative impact on downstream consumption has weakened, allowing market sentiment to improve. An aluminium smelter in Yunnan reduced production due to an accident last Friday, which also boosted market sentiment. Aluminum prices are expected to rebound further in the short term. However, in the long run, the upside room of SHFE aluminium will depend on consumption recovery.
Macro front
On May 15, Shanghai held the 184th press conference on the prevention and control of COVID-19, and said that the resumption of business will be promoted in stages from May 16.
The PBOC and the China Banking and Insurance Regulatory Commission jointly issued the Notice on Adjustment of Differential Housing Credit Policies on May 15. It shows that for households who take loans to buy ordinary self-owned houses, the lower limit of the commercial personal housing loan interest rate for first time home buyers is adjusted to not lower than 20 basis points below LPR of the corresponding term.
Fundamentals:
The aluminium ingot social inventories across China’s eight major markets totalled 984,000 mt as of May 16, down 19,000 mt from a week ago and 77,000 mt lower than a year ago. This also marked a monthly drop of 55,000 mt.
The domestic pandemic is gradually under control, and its negative impact on downstream consumption has weakened, allowing market sentiment to improve. An aluminium smelter in Yunnan reduced production due to an accident last Friday, which also boosted market sentiment. Aluminum prices are expected to rebound further in the short term. However, in the long run, the upside room of SHFE aluminium will depend on consumption recovery.
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