Recently, the US dollar index has continued to climb, but the non-ferrous market has not fallen sharply, and the trend of variety differentiation is more obvious. As of the close of trading on the afternoon of August 24, the trends of Shanghai Aluminum and Shanghai Nickel in the non-ferrous sector were divergent. Among them, Shanghai aluminum futures continued to rise, closing up 2.66%, setting a one-and-a-half-month high; Shanghai nickel futures weakened all the way, closing down 2.03% on the day.

It is worth noting that the recent macro guidance for non-ferrous metals is relatively limited. Although the recent Fed officials have a hawkish attitude and the US dollar index has continued to strengthen, it has not significantly dragged down the trend of non-ferrous metals, and the trend of related varieties has returned to the fundamentals. Wu Haode, head of Changjiang Futures Guangzhou Branch, believes that there are two main reasons:

First, the previous round of sharp declines in non-ferrous metal prices has fulfilled the expectations of a global economic recession under the Fed rate hike cycle. Since July, the Fed's hawkish interest rate hike attitude has eased, and the US inflation has turned a little bit, and the market's expectations for forced interest rate hikes have been relatively moderate. Although the U.S. dollar index is still strong, the expectation of interest rate hikes may not stimulate the U.S. dollar index to continue to rise sharply. Therefore, the impact of the short-term strengthening of the US dollar on non-ferrous metals is marginally weakened, that is, non-ferrous metals are being "desensitized" to the US dollar in stages.

Second, the rising driving force of the non-ferrous metal market since August has mainly come from the domestic market. On the one hand, with the support of domestic policies, market expectations have improved; on the other hand, high temperatures in many places continue to lead to shortages of power supply, triggering production cuts at the smelting end, and pushing metal prices to rebound. Therefore, it can be seen that the inner disk is stronger than the outer disk, and the contrast between the internal and external strengths of aluminum prices is particularly obvious.

Looking at the aluminum market, analysts believe that the recent increase in domestic and foreign supply-side disturbances has brought obvious short-term support. Yang Lina said that at present, the domestic aluminum supply side is affected by high temperature power cuts, and the production capacity continues to decrease. In Europe, aluminum production capacity has also been cut again due to energy problems. On the demand side, processing companies are also affected by power curtailment and the operating rate has dropped. With the continuation of the off-season of consumption and the deterioration of the external environment, the order situation of the processing industry is relatively weak, and the recovery of terminal consumption will take time and more stimulus measures. In terms of inventories, social inventories have accumulated a small amount of negative aluminum prices.

Domestically, on August 22, the power curtailment requirements of Sichuan Province were upgraded again, and all electrolytic aluminum enterprises in the province basically stopped production. According to statistics, there are about 1 million tons of electrolytic aluminum operating capacity in Sichuan Province, and some enterprises have started to reduce load and let electricity to the people since mid-July. After August, the power supply situation became more severe, and all electrolytic aluminum production capacity in the region has been shut down. Chongqing, which is also in the southwest, is also in a tense situation in power supply due to high temperature weather. It is understood that two electrolytic aluminum plants have been affected, involving a production capacity of about 30,000 tons. He said that due to the above-mentioned supply factors, the loose pattern of aluminum fundamentals has changed. In August, the excess pressure on the supply side of electrolytic aluminum was suspended, which supported prices in the short term.

"How long the strong performance of aluminum prices can last mainly depends on the duration of the strike at overseas aluminum plants and whether the scale of production reduction due to energy problems will be further expanded." Yang Lina said that the longer the supply relative to demand continues to be tight, the impact on aluminum prices will be. The greater the impact on the balance of supply and demand.

Hou Yahui said that with the end of the summer vacation, the continuous high temperature weather in the southwest region is expected to gradually come to an end, but it will take some time to alleviate the power problem, and the production process of electrolytic aluminum determines that the restart of the electrolytic cell will also take time. He predicts that after the power supply of electrolytic aluminum enterprises in Sichuan Province is guaranteed, it is expected that all production capacity will be restarted at least about a month.

Wu Haode believes that the aluminum market needs to pay attention to the following factors: In terms of supply and demand, the power cut in Sichuan directly leads to the reduction of 1 million tons of production capacity and the delay of 70,000 tons of new production capacity. If the impact of the shutdown lasts for one month, the aluminum output may be as high as 7.5%. tons. On the demand side, under the favorable domestic macro policies, credit support and other aspects, there is an expectation of marginal improvement in consumption, and with the advent of the "Golden Nine Silver Ten" peak season, the demand will increase. Overall, the fundamentals of aluminum supply and demand can be summarized as: the supply margin decreases, the demand margin increases, and the balance of supply and demand throughout the year improves.

In terms of inventory, the current LME aluminum inventory is less than 300,000 tons, the previous aluminum inventory is less than 200,000 tons, the warehouse receipt is less than 100,000 tons, and the domestic electrolytic aluminum social inventory is less than 700,000 tons. "The market has always said that 2022 is the year when electrolytic aluminum is put into production, and this is indeed the case. However, if we look at the reduction in the production capacity of aluminum next year and in the future, the operating capacity of electrolytic aluminum is constantly approaching the 'ceiling', and the demand remains stable. In the case of growth, whether there is an inventory crisis in aluminum, or whether the market may have begun to trade, this needs attention." He said.

In general, Wu Haode believes that the aluminum price will be optimistic in the "golden nine silver ten", and the upper height sees 19,500-20,000 yuan / ton. Regarding whether the aluminum price will rebound strongly or idling in the future, we should pay attention to the substantial improvement of consumption and the room for supply disturbance.