SMM Aluminium Market Morning Comment (Feb 26)

At last Friday’s night session, the most-traded SHFE 2404 aluminium contract opened at 18,785 yuan/mt, with its lowest and highest at 18,700 yuan/mt and 18,840 yuan/mt before closing at 18,730 yuan/mt, down 120 yuan/mt or 0.64%. LME aluminum opened at $2,202/mt last Friday, with its high and low at $2,213/mt and $2,175/mt respectively before closing at $2,184/mt, down $17/mt or 0.77%.

Summary: From a macro perspective, better economic data continued to cool expectations of the Fed's interest rate cut, and commodities were under pressure. Fundamentally, Guinea may hold a nationwide strike this week, and the market is worried that it will affect the supply of bauxite in Guinea, which has not yet been affected; domestic aluminium companies maintain steady operations. On the demand, aluminium downstream companies are steadily resuming production. With the end of rain and snow and the arrival of the peak season, short-term consumption is expected to continue to improve. Low inventory and weak inventory growth will also somehow support aluminium prices. However, the recent opening of the aluminium ingot import window may inhibit the upward room of aluminium prices. Overall, aluminium prices continue to fluctuate, and we need to pay attention to the impact of the strike in Guinea on the mine, the recovery of consumption, and the inventory decline of aluminium ingot and aluminium billets.