SMM August 26 News:
Today, the most-traded SHFE aluminum 2610 contract opened at 23,950 yuan/mt, with a daily high of 23,950 yuan/mt and a low of 23,755 yuan/mt, closing at 23,760 yuan/mt, down 215 yuan/mt or 0.9% intraday. The bulls lacked upward momentum, prices pulled back slightly, and the rebound pace slowed. Trading volume was 109,000 lots, down 8,685 MoM; open interest was 262,000 lots, down 2,823 lots MoM, a slight decrease mainly due to long position reduction, with no large-scale increase in short positions. The price pullback was more driven by long profit-taking, and bears' active offensive was limited.
SMM comments: Macro sentiment oscillated, new progress in US-Iran negotiations, Iran and Oman plan to establish a safe sea lane in the Strait of Hormuz, easing market geopolitical tensions. On the fundamentals side, destocking of domestic aluminum ingot inventories continued, providing bottom support for aluminum prices. However, outside China, driven by new and resumed production capacity, the daily average aluminum production is expected to continue to rise. The SHFE/LME price ratio is recovering, and as orders on hand are digested, export demand is expected to pull back MoM but short-term resilience still exists. On the domestic demand side, the transition period between off-season and peak season has not yet been clearly defined, and the market has some concerns about peak season demand. Short-term aluminum prices are expected to consolidate on a subdued note.
Today, the most-traded alumina 2610 contract opened at 2,666 yuan/mt, with a daily high of 2,666 yuan/mt and a low of 2,635 yuan/mt, closing at 2,638 yuan/mt, down 26 yuan/mt or 0.98% intraday. Trading volume was 163,000 lots, up 49,427 lots MoM, a significant increase, indicating concentrated release of selling pressure. Open interest was 264,000 lots, up 24,456 lots MoM, also increasing significantly. During the decline, bears opened a large number of new positions, not just long position stop-loss, new bearish forces entered, and downward momentum was strong.
SMM comments: This week, spot alumina prices fell steadily, with China's oversupply pattern continuing to exert pressure, and the price center further moved down. Markets outside China performed strongly, boosted by increased demand for bagged alumina in the Middle East and tight supply of Indonesian bauxite, driving overseas alumina prices higher, and the price spread between Chinese and overseas markets further widened. Looking ahead to next week, an alumina enterprise in Guangxi will finish maintenance, capacity will be restored to some extent, supply is expected to increase, and the market remains under pressure. On the import/export side, net imports in July were 63,000 mt, and subsequent net imports are expected to decrease, with port inventory likely to decline during the period. Overall, inventory levels are expected to fluctuate within the current range, and spot prices will remain in the doldrums.
[The information provided is for reference only. This article does not constitute direct advice for investment research decisions. Clients should make decisions with caution and not replace their own independent judgment. Any decisions made by clients are not related to SMM.]
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