SHFE aluminum edged up with a rebound pace slowing down; alumina market sees strong supply and weak demand, limiting rebound room [SMM aluminum brief review]

SMM, September 2:

The most-traded SHFE aluminum 2610 contract closed at 24,100 yuan/mt today, up 30 yuan on the day, a gain of 0.12%. Trading volume was 163,674 lots, open interest stood at 242,331 lots, with a daily decrease of 6,267 lots, as both bulls and bears reduced positions to lock in profits and exit. Prices held above the 5-day, 10-day, 30-day, and 60-day moving averages. Short-term bearish pressure continued to ease, the rebound momentum slowed somewhat, and the contract retreated after a rapid intraday rise to close slightly higher, with moderate buying interest from bulls at lower levels. The 5-day and 10-day moving averages turned upward, while the 30-day and 60-day moving averages remained downward, indicating that the medium-term downtrend has not been fully reversed. The previous high range above constitutes strong medium and long-term resistance, constraining further upside room, while multiple short-term moving averages below form solid support at lower levels. The DIF and DEA lines are both above the zero axis, with DIF above DEA, and the MACD red bars continue to extend, suggesting bullish momentum remains in release, with short-term consolidation and a pause in the trend.

SMM commentary: On the macro front, the Jackson Hole central bank symposium sent hawkish signals, and Fed Chairman Warsh's debut remarks leaned hawkish, reigniting expectations for a September rate hike. Global liquidity expectations tightened, macro sentiment came under pressure, exerting bearish pressure on aluminum prices. However, continued destocking in China and the ongoing "September peak season" provided strong support beneath aluminum prices. With bullish and bearish factors intertwined, aluminum prices are expected to continue to consolidate at highs.

The most-traded alumina 2610 contract closed at 2,708 yuan/mt today, up 25 yuan on the day, a gain of 0.93%. Trading volume was 244,686 lots, open interest stood at 135,511 lots, down 8,781 lots MoM, as profit-taking concentrated and positions were closed during the rebound. Prices held above the 5-day, 10-day, and 30-day moving averages but remained below the 60-day moving average. The short-term rebound after the oversold decline continued, with buying interest from bulls at lower levels strengthening somewhat. The 5-day and 10-day moving averages remained downward, and the medium-term downward consolidation pattern has not yet reversed. The 60-day moving average above constitutes strong medium and long-term resistance, constraining further upside room for the rebound. The DIF and DEA lines are both below the zero axis, and the MACD red bars continued to expand, indicating further release of short-term rebound momentum.

SMM commentary: The current alumina market remains in a pattern of strong supply and weak demand, with prices falling under pressure and overall bearish sentiment in the spot market. On the supply side, production continued to recover, with domestic production up MoM recently. Guangxi steadily ramped up output, and with production resumptions in Shanxi this month and new capacity in Guangxi about to be released, supply growth expectations continued to weigh on prices. Outside China, the supply mismatch logic that previously supported high prices gradually weakened, and prices outside China pulled back. Net imports in July fell MoM, somewhat easing the import shock pressure on the Chinese market. On the inventory side, the inventory buildup trend continued: aluminum smelters restocked in small quantities at low prices, port inventories climbed to historical highs, plant inventories rose alongside production increases, while warrants and in-transit inventories saw some destocking. Looking ahead, supply-side pressure is only increasing, demand shows no bright spots, prices still have downside room, and the inventory buildup trend is expected to continue.

[The information provided is for reference only. This article does not constitute direct investment research or decision-making advice. Clients should make decisions prudently and should not use this as a substitute for independent judgment. Any decisions made by clients are not related to Shanghai Metals Market.]