Inflation pushed domestic aluminum price keep up

The United States quantified ease policy to push inflation expectation.
(China Aluminum Network): The situation of the exchange rate interference in states will appear gradually. Inflation expectation will rise obviously. Inflation indicates that money purchasing power weakens.
Energy saving and emission reduction promote the following production capacity to slip

In September, China’s electrolytic aluminum production reached 1,172,000 tons; chain relative slipped 8.4%, which showed that domestic electrolytic aluminum production continued to slip. Judging from the current situation, the effect of energy saving and emission on electrolytic aluminum production continues to exist in the fourth quarter. The decline of domestic electrolytic aluminum capacity means that market supply in decreasing.

Selling reserves cant change the decline of domestic stock.

On October 22, State Development and Reform Commission released a notice that State Reserve items regulator Center would sell some of national aluminum ingot reserves. With further expansion of global inflation, State Reserves may sell again. On November 4, according to Shanghai nonferrous, domestic electrolytic aluminum reserves were 802,000 tons, declined 2000 tons compared with previous week. This showed that current market is still in short supply. However, together with domestic energy saving and emission reduction, electrolytic aluminum output will further slip.

Aluminum futures still keep rising.  Price uncertainty mainly depends on China’s monetary policy. China’s Monetary tightening might not restraint the rise in aluminum prices. If USA and Europe start monetary tightening policy, changes of market expectation will put pressure on aluminum prices.

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