Previously, the local verification phase of the electrolytic aluminum cleaning and rectification operation was completed. Reviewing this action also had a corresponding impact on the trend of aluminum prices. As the reduction of production by various enterprises continues, the prescribed date for shutting down the production capacity of illegal production is approaching, and the policy is constantly being implemented. Overall, the price of aluminum has begun to be relatively clear. Due to the impact of production cuts, aluminum prices have begun to gain upward momentum. Analysis of the reasons for affecting the price of aluminum this year is inevitably due to policy factors. Since the beginning of this year, the relevant departments have put the clean-up and rectification into this year’s reform plan, and the enterprises in various regions are actively cooperating with the implementation. So that the relevant policies can be implemented smoothly.

Judging from the effect of reducing production, the current tens of thousands of tons will not fundamentally change the market supply and demand structure, but it is already clear that the closure of illegal production capacity this year is inevitable. After the illegal production capacity in Xinjiang is gradually shut down, the next step of illegal closure in Inner Mongolia and Shandong may also be gradually started. According to the final time node of October 15 given by the previous policy, this kind of capacity shutdown may be followed. It will last until August and September. The intensive production cuts will provide good protection for aluminum prices, as well as the heating season. The 2+26 policy will be implemented and the near-low and high pattern will remain. If the policy is implemented smoothly during the period, it is expected that the aluminum price will remain strong for a long time. In addition, this year, the market is more consistent with the supply-side reforms. The shorts have concerns about entering Shanghai Aluminum. The long position is because the supply-side reforms have not been implemented as much as the market expectations after April, and they have not advanced for a long time, and the patience has gradually subsided.

According to statistics, this year it is expected that 684,000 tons of production capacity will be put on the market. If Inner Mongolia and Shandong have not made more performances, then the annual production reduction is estimated to be around 600,000 tons. In addition, this year's demand is still difficult to see too much bright spots, and the aluminum market will remain in surplus throughout the year. However, the occurrence of illegal closures in Inner Mongolia and Shandong in the later period is a high probability event. It is not ruled out that there are staged mismatches in individual months this year, but the high inventory makes it difficult for the pattern of premiums caused by spot tension last year. Although supply pressure may gradually ease with the supply side reform, July and August will still be two months of fundamental pressure, and the aluminum market will begin to enter the seasonal off-season. Statistics Bureau data show that as of the end of June The housing starts and the increase in vehicle production have fallen rapidly for many consecutive months. Maintaining high spot stocks and discounts also confirms the current consumption situation. At the same time that futures are driven by news, spot tracking is not active, and there is abundant supply in the market. According to the information feedback now, the inventory is still likely to continue to rise. It is difficult to see the turning point in the short term, but as the aluminum enterprises enter the intensive production stoppage period, the inflection point of aluminum prices will appear in August and September. On the whole, it is difficult to achieve a large effect on the market impact in the short-term production cuts, but in the long run, the production will gradually accumulate, and the market gap will lead to the emergence of long market. At present, the repetition of aluminum prices is mainly due to the relative wilting of the fundamentals, and the reduction in production has not yet reached the desired effect. The current unilateral trend market still needs fundamental cooperation before. In the short term, aluminum prices will remain volatile and the impact of supply-side reform will remain positive in the long run.