Deutsche Bank Sees Higher Aluminum Price on Tighter Supply

Futures: In terms of futures performance, the most-traded alumina futures 2605 contract was in the doldrums during the overnight session. After the opening, it surged to 2,694 but failed to break through effectively. With insufficient upward momentum, it subsequently pulled back to close at 2,668, displaying an overall pattern of retreat after rapid rise. Decreased trading volume indicated declining market participation, while open interest edged up, reflecting intensifying divergence between bulls and bears. From a technical perspective, the current price is running above MA5 (2,658.68) and MA10 (2,656.3), still providing some short-term support, but is clearly under pressure from MA20 (2,690.04) and MA40 (2,755.38), with strong resistance from medium-term moving averages, and the overall trend remains weak. In the short term, futures are likely to move sideways, with attention on resistance near the 2,690 level above and support around 2,650 below.

[Short-Term Supply-Demand Resonance, Bullish Trend in Aluminum Prices Continues] Overall, the Middle East negotiation process experienced repeated setbacks, but the supply gap outside China and continued LME inventory drawdown supported LME prices to hold up well. China's aluminum ingot inventory remained at elevated levels, and attention should be paid to whether a turning point in domestic inventory can materialize smoothly.

This week, the weekly operating rate of leading downstream aluminum processing enterprises in China was flat MoM at 64.7%. such as can stock, energy storage, and automobiles. However, aluminum prices fluctuated at highs, exports to the Middle East were impeded, and some end-use consumption recovered less than expected, limiting upside room for the operating rate. The industry exhibited the characteristics of “steady with progress and structural divergence.”