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Supported by favorable domestic policies and power production restrictions, aluminum prices are expected to exhibit a relatively strong performance.

The recent performance of the industrial metals market has been influenced by both domestic and international policy factors. Positive expectations regarding domestic policies have provided some support to the industrial metals market. The government has implemented a series of measures, including increased investment in infrastructure construction and strengthened regulation of the real estate market. These policy factors have had a positive impact on the demand for industrial metals. Additionally, the global economic recovery and the resurgence of the manufacturing sector have also provided some support to the industrial metals market.

The news of power production restrictions in the southwestern region has had a significant impact on aluminum prices. Due to power supply constraints, some aluminum smelters in the southwestern region have been forced to reduce production. This news has played a crucial role in supporting aluminum prices and has had an impact on the market. It is rumored that the reduction rate in Yunnan Province has been roughly determined, with four aluminum smelters expected to reduce production by 9% to 40%. This reduction is anticipated to start soon, with a total reduction of up to 1.15 million tons. This measure will reduce the supply of electrolytic aluminum in the market, thereby providing support to aluminum prices.

However, the performance of the spot market transactions has been generally average, and demand has not been as robust as expected. This is mainly due to the current macroeconomic environment’s uncertainty, incomplete recovery of downstream industry demand, and some companies’ cautious approach to raw material procurement. Therefore, despite the positive expectations from policy and the news of power production restrictions in the southwestern region supporting aluminum prices, demand in the spot market has been relatively weak.

Furthermore, the smooth operation of the Lanxin Railway has also had an impact on the market. This railway connects China’s northwest region with Central Asian countries, making it easier to transport goods from the northwest to Central Asia. With the smooth operation of the Lanxin Railway, the arrival of goods from the northwest has increased, putting pressure on inventory clearance. This has also limited the upward potential of aluminum prices, potentially exerting pressure as aluminum prices rise.

In summary, while aluminum prices may increase today, the extent of the increase may be somewhat limited. This is mainly because the news of power production restrictions in the southwestern region has provided some support to aluminum prices, but demand in the spot market has been relatively weak. Additionally, the smooth operation of the Lanxin Railway has had an impact on the market, restricting the upward potential of aluminum prices. In the future market, we need to closely monitor the comprehensive impact of various factors, including policy, demand, and logistics, to better understand market dynamics and investment opportunities.

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