On the macro level, the People's Bank of China decided to reduce the deposit reserve ratio of financial institutions by 0.25 percentage points on December 5, 2022. The RRR cut reflects the forward-looking nature of the monetary policy, demonstrates the strategic determination of the monetary policy, is conducive to stabilizing market expectations, and has important policy significance.

Domestic electrolytic aluminum supply rebounded slightly. Recently, the operating capacity of electrolytic aluminum in Sichuan has been slightly restored, but due to the shortage of electricity during the dry season, it is expected that it will be difficult to reach full production by the end of this year. Driven by Guangxi's announcement of relevant incentive policies for resumption of production, it is expected that the electrolytic aluminum resumption project in Guangxi is expected to usher in a speedup; the reduction of 80,000 tons of electrolytic aluminum production in Henan has been implemented, and the time for resumption of production has not yet been determined; the progress of new production in Guizhou and Inner Mongolia has not met expectations . On the whole, under the influence of the coexistence of increase and decrease, the domestic electrolytic aluminum production capacity fluctuates within a narrow range. In November, the domestic electrolytic aluminum production capacity is expected to recover to 40.51 million tons, but compared with the previously expected annualized production capacity of 41 million tons, there is still a certain gap.

At the same time, the start-up performance of domestic aluminum downstream processing enterprises is mainly weak. As of November 24, the weekly operating rate of aluminum profile enterprises was 65.8%, down 2% from the previous week. Affected by weaker downstream demand and fewer orders, the operating rates of aluminum profiles and aluminum foil companies all fell last week. Although the operating rate of aluminum strip and aluminum cable is temporarily stable, it does not rule out that there may be a reduction in production in the later period. Combined with inventory, as of November 24, the domestic social inventory of electrolytic aluminum was 518,000 tons, continuing the decline in inventory since October. The author believes that the removal of social inventory is not driven by the consumer side, but caused by poor transportation and delays in the arrival of products from aluminum factories. The inventory in transit and in the factory area will still bring potential accumulation pressure to the aluminum market in the later stage.

In terms of terminal demand, the investment in power grid projects across the country from January to October was 351.1 billion yuan, a year-on-year increase of 3%. Among them, the power grid investment in October was 35.7 billion yuan, a year-on-year decrease of 30.9% and a month-on-month decrease of 26.7%. From the perspective of the operation of the wire and cable industry, with the approach of the seasonal off-season, cable orders have declined, and the amount of stock in the future will gradually decrease. It is expected that the operating rate of wire and cable enterprises in November will be 80.6%, down 0.44% month-on-month and 5.49% year-on-year. On the one hand, while the domestic terminal demand has been impacted, the logistics and transportation have been blocked and the delivery and procurement time have been delayed. Against this background, the production progress of the cable industry has slowed down; For the consideration of withdrawing funds, the production will be deliberately controlled and the operating rate will be reduced, which will also reduce the demand for aluminum.

In October, the domestic automobile production and sales presented a situation of ice and fire. Traditional fuel vehicles declined significantly, while new energy vehicles developed rapidly, hitting record highs. Although the terminal market was under pressure, the supply of automobiles in October fell slightly compared with September, but thanks to the continuous efforts of the vehicle purchase tax reduction policy, the production and sales of automobiles in October still maintained a year-on-year growth trend. my country's auto sales are expected to reach 27 million this year, a year-on-year increase of about 3%. It has not yet been decided whether the preferential tax policy for the purchase of traditional fuel vehicles will be continued next year, and subsidies for new energy vehicles will be launched soon, so there are still certain uncertainties in market expectations.

On the whole, under the background that the macro pressure still exists and the contradiction between supply and demand in the market eases, it is expected that the aluminum price will be dominated by range fluctuations in the near future. Ton.