The author believes that there are the following reasons:
1. In terms of technology, the price of aluminum has soared recently. The daily RSI indicator shows a certain overbought sign, and the first Wednesday of each month is the LME option announcement day, causing the bulls to grab profit and close the position. More killing more than the stampede.
2. High aluminum prices and high domestic aluminum spot premiums have delayed the purchase of downstream aluminum companies. While the supply of upstream aluminum plants has increased and some imported aluminum ingots have flowed in, domestic aluminum ingot stocks have increased and spot premiums have narrowed. According to the relevant institutions reported on November 2, the spot price of aluminum was 280-320 yuan/ton, and the average price has dropped by 310 yuan/ton compared with last Friday.
The short-term aluminum spot market atmosphere changed, and the aluminum price continued to rise.
3. From the perspective of gold, silver and stock market trends, the expected rise in the US election to Trump has put pressure on the relevant market, and market risk sentiment has risen.
The author believes that the current decline in aluminum prices is conducive to the downstream companies to receive goods on a dip, to alleviate the cost increase caused by the rise in aluminum prices, the company's profits are reduced, there is no need to panic about the fall in aluminum prices, after all, the current poor transportation situation still exists. The supply of spot delivery is still tight, and the current increase in alumina and coal prices will soon drive the cost of aluminum plants, which is a factor supporting aluminum prices. There should be no expectation that the price of aluminum prices will fall.
The market outlook focuses on transportation recovery and inventory changes. Overall, with the arrival of the off-season, the supply capacity is rising, and it is unlikely that aluminum prices will once again rise strongly. Judging from the near-high and low rankings of Shanghai-Aluminum contract prices, the market is not optimistic about the medium- and long-term trend of aluminum prices.