After a long and challenging period of decline in 2012, domestic aluminum prices are finally showing signs of a potential rebound. This shift is not just a random fluctuation but the result of several key factors that have recently come into play.
Firstly, there has been a notable drop in aluminum inventory in Nanhai, Guangdong. According to recent data, the local inventory has decreased from 235,000 tons to 152,000 tons, which is a significant reduction. This decline can be attributed to fewer aluminum ingots arriving at the market. However, it's also possible that the improved economic environment and increased awareness among business owners about market trends have contributed to this change. The region appears to be more proactive in adjusting to market conditions compared to other parts of the country.
Secondly, the stock market has experienced a strong rebound, which often signals positive movement in the metal sector. The A-share market saw a surge last Friday, with trading volume exceeding 100 billion yuan for the first time and the index rising over 4%. This indicates a return to a stronger trend. The stock market’s performance is usually a leading indicator for commodity markets, so it's reasonable to expect the metal market to follow suit. The rally in the stock market is partly driven by companies trying to improve their financial positions before the end of the year, especially those sensitive to economic fluctuations like banks. Additionally, the government's push to boost domestic demand has created a need for market support, making the stock market a key driver of economic confidence.
Lastly, the Chinese currency has faced prolonged depreciation pressure, and now that pressure is reaching a critical point. Data shows that the balance of financial institutions at the end of November was 2,578.7 billion yuan, down 73.627 billion yuan from October. Although this decrease was anticipated, the situation highlights the need for policy adjustments. Historically, when internal issues arise, they are typically resolved internally. However, external interventions can complicate matters further. With interest rates potentially being cut and deposit levels declining, the government may take measures to stabilize the economy.
Looking ahead, we expect both the stock market and the metal market to see a substantial rebound next year. Aluminum prices, in particular, could rise by more than 10%, signaling a positive shift after years of downward pressure. This development marks a turning point for the industry, offering renewed hope for investors and market participants alike.Prism Pole,Professional Survey Prism Pole,Professional Leica Prism Pole,All Measurement Prism Pole
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