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On October 30th, Shanghai Aluminum Corporation opened sharply lower, fell sharply, and fell sharply across the board. Internal analysts believe that whether the impact of tariff adjustments on aluminum prices has been digested is still difficult to determine for the time being. The rise and fall of domestic aluminum prices will mainly depend on the status of the spot supply.
On Monday, October 30th, the Shanghai Futures Exchange (SHE) aluminum main 701 contract opened at 20460 yuan and fell sharply to close at 20,190 yuan, down 770 yuan. The spot 611 contract closed at 20,540 yuan, down 760 yuan.
Gao Te Futures analyst Gao Ye believes that the increase in China's export tax will have a major short-term bearish effect on Shanghai Aluminum, which will stimulate the development of the aluminum industry in the long run.
Shanghai Aluminum's main contract 701 sharply jumped lower and opened lower at 20460. After touching 20740 in an instant, it encountered shorts and resolutely stifled pressure. It once fell below 10 minutes in the morning and then bounced back under the effect of partial set-offs. Closing position, closing at 20190. On the same day, the daily line is a big Yin line that leaves gaps. The taxation of aluminum on the 27th was the direct cause of the 30-day market.
Shanghai spot aluminum fell by 425 yuan to 20,945 yuan per ton. In Nanhai, Guangdong, aluminum prices were extremely weak, most downstream manufacturers turned bearish, and few buyers entered the market, causing prices to fall all the way, and the transaction range was between 20,800 and 20,960 yuan/ton. Fall 610 yuan.
The London Metal Exchange (LME) Zinc hit a record high on the 27th under the incentive to reduce inventory. This boosted market sentiment and pushed up the lead to the contract high. Aluminum also followed the rise, and aluminum closed at 2815. The dollar rose 2% on the 26th. On the 27th, the U.S. dollar index in the New York market fell to a one-month low. Data showed that the U.S. economic growth rate in the third quarter was far behind expectation. Weak data consolidates the Federal Reserve’s message this week that there is no need to adjust interest rates in the near term. It also supports the view that the Fed will cut interest rates. The U.S. Department of Commerce announced that the third-quarter GDP of the country’s GDP was at an annual growth rate of 1.6% from a year earlier, and the pace was slower in three years, far behind the expected growth of 2.2%. The second quarter was 2.6% growth. The performance of the US dollar also provided support for the rise of metals.
China’s Ministry of Finance announced that it will impose a lower tentative tax rate on 58 imports. The tax rates for 26 resource products such as coal, refined oil, and alumina will be reduced from 3 to 6% to 0 to 3%; at the same time, tariffs will be imposed on 110 commodities at a tentative rate, including copper, nickel, and 11 items of non-ferrous metals such as electrolytic aluminum are 15%.
The news will have a direct short-term bearish effect on Shanghai Aluminum. However, in the long term, the policy will stimulate the development of the aluminum industry. At the same time, due to the reduction of domestic aluminum ingot exports, it will provide support for London Aluminum, so the policy will be seen from the medium term. It will not have a major impact on Shanghai Aluminum, but the relationship between Shanghai Aluminum and London Aluminum will be repositioned.
Institutionally, Macquarie believes that for the time being, the export tax on aluminum semi-manufactured products and aluminum alloys has not yet increased. Therefore, the main impact will be to accelerate the transfer of aluminum product exports. Unless the government sets the same export tax on all aluminum products, the higher export taxes on primary aluminum only encourage other forms of exports. And will not be surprised to see the price of 3,000 US dollars / ton before the end of the year. Looking ahead to 2007, although it still has not changed its view on the basic neutrality of the aluminum market in 2007, we believe this news will be positive (along with very low levels of inventories) and it is expected that there will be no substantial decline in aluminum prices.
London Aluminum will test the top 2857 in the short term in a steady rally. Given that Shanghai aluminum has broken below 20,500 important support on Monday, the short-term will cover the gap between October 16 and 17, which is to say, short-term support at 19,900 line, this position is also near the 20-day moving average.