Low inventory and expectations of a higher proportion of liquid aluminum are expected to provide strong support for aluminum prices, which are expected to hold up well. [SMM Aluminum Futures Brief Comment]

Published: Jun 16, 2025 16:23

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》Check SMM's aluminum product quotes, data, and market analysis

SMM, June 16:

Today, the most-traded SHFE aluminum 2507 contract opened at 20,450 yuan/mt, with a high of 20,330 yuan/mt, a low of 20,405 yuan/mt, and closed at 20,460 yuan/mt, down 0.29%. Trading volume was 98,000 lots, and open interest was 204,000 lots.

SMM Commentary: On the macro front, as trade tensions ease, US consumer confidence improved for the first time in six months, and pessimism over soaring underlying inflation has also significantly eased. The rebound in China's May manufacturing PMI and improvement in export indicators provide demand support, with domestic economic resilience remaining. Fundamentals side, domestic aluminum smelters' operating capacity remained stable, with reduced casting ingot volumes prompting domestic aluminum ingot inventory to continue destocking. Cost side, alumina and auxiliary material prices are expected to weaken, weakening cost support for aluminum. Demand side faces dual pressures from domestic seasonal weakness and trade uncertainties, with aluminum processing enterprises' operating rates expected to come under pressure in the short term. Overall, the current low inventory and expectations of a higher proportion of liquid aluminum provide strong support for aluminum prices, but off-season pressure on the demand side limits upside room. Spot aluminum ingots in major consumption areas may soon face a situation of weak supply and demand, with aluminum prices expected to hold up well in the short term.

Today, the most-traded alumina 2509 contract opened at 2,846 yuan/mt, with a high of 2,863 yuan/mt, a low of 2,822 yuan/mt, and closed at 2,852 yuan/mt, unchanged at 0.00%. Trading volume was 163,000 lots, and open interest was 299,000 lots.

SMM Commentary: Last week, alumina's operating capacity rose 1.74 million mt/year MoM to 89.01 million mt/year. Spot alumina supply was relatively looser compared to the previous period, with aluminum smelters' total weekly alumina inventory rising 16,000 mt to 2.646 million mt. In the short term, alumina fundamentals are expected to maintain a relatively loose pattern, with alumina spot prices expected to pull back. Subsequent attention should be paid to changes in domestic alumina enterprises' capacity, as well as the supply of imported alumina.

[The information provided is for reference only. This article does not constitute direct investment research and decision-making advice. Clients should make cautious decisions and not rely on this as a substitute for independent judgment. Any decisions made by clients are unrelated to SMM.]

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