On the inventory side, LME aluminum ingot stocks fell by 2900 tons to 1.473 million tons on January 2. On Jan. 2, domestic social inventory of aluminum ingots increased by 5000 tons to 587000 tons from last Thursday.

Viewpoint: on December 31, the Yunnan Shenhuo 900000 ton green hydropower aluminum integration project was officially put into production. At present, due to the high profit of the aluminum plant, the aluminum market presents the back structure. In the short term, due to the proximity of the Spring Festival holiday, coupled with the gradual arrival of production with the resumption of production and new production capacity at the beginning of 2020, the current spot price is close to the price target of a large factory, and at the same time, under high profits, the aluminum plant is stepping up its short position. Aluminum stocks have accumulated in the past two weeks. It is estimated that aluminum stocks will continue to accumulate in January, but aluminum prices are also difficult to fall sharply in the context of low inventories. Aluminum prices are expected to continue to fluctuate in the range. In the later stage, we still need to pay attention to the accumulation range.

Strategy: unilateral: neutral, wait and see. Arbitrage: wait and see.

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