SMM, October 15:
The most-traded SHFE aluminum 2611 contract closed at 23,040 yuan/mt today, down 305 yuan on the day, a decline of 1.31%. Trading volume was 214,916 lots, and open interest was 229,421 lots, with a daily decrease of 8,106 lots, as both bulls and bears continued to reduce positions and exit. Prices remained below the 5-day moving average (23,316), the 10-day moving average (23,596.5), the 30-day moving average (24,010.17), and the 60-day moving average (23,821.08), with all four moving averages exerting overhead pressure. The contract opened at 23,155 and hit a high of 23,310 before consolidating lower, dipping to a low of 22,940, and closing near the intraday low at 23,040. Both the intraday high and closing price moved lower compared with the previous day, and the full-day average price of 23,105.94 was above the closing price. The 5-day moving average has crossed below the 10-day moving average, forming a death cross, while the 30-day and 60-day moving averages continue to trend downward, extending the bearish alignment of moving averages. In MACD (12,26,9), DIF stood at -212.22 and DEA at -89.37, with both lines below the zero axis and DIF below DEA. The MACD histogram was -245.70, with the green bar persisting and widening further from -228.99 the previous day, as the negative gap between DIF and DEA expanded. The intraday high and closing price moved lower in tandem, and the pace of position reduction and exit accelerated.
SMM commentary: US September CPI data came in above market expectations, and expectations for US Fed interest rate hikes continued to heat up, persistently weighing on the valuation of the nonferrous metals sector. Domestically, September unwrought aluminum and aluminum semis exports reached the highest monthly export level in the past three months, with aluminum semis exports maintaining a solid trend. Combined with the continued destocking of domestic aluminum ingot social inventory, this provided support for prices. Overall, under the pressure of expected US Fed rate hikes, aluminum prices are expected to maintain a weak trend in the short term.
The most-traded alumina 2701 contract closed at 2,584 yuan/mt today, down 51 yuan on the day, a decline of 1.94%. Trading volume was 198,639 lots, and open interest was 308,063 lots, with a daily increase of 27,223 lots, as volume and open interest rose while prices fell. Prices remained below the 5-day moving average (2,647.40), the 10-day moving average (2,668.10), the 30-day moving average (2,704.77), and the 60-day moving average (2,729.72), with all four moving averages exerting overhead pressure. The contract opened at 2,620 and hit a high of 2,624 before trending lower in a one-sided decline, touching a low of 2,571 and closing near the intraday low at 2,584. The full-day average price of 2,591.73 was above the closing price. The death cross formed by the 5-day moving average crossing below the 10-day moving average persisted, while the 30-day and 60-day moving averages continued to drift lower slowly, further cementing the bearish alignment of moving averages. In MACD (12,26,9), DIF stood at -26.7531 and DEA at -17.8104, with both lines below the zero axis and DIF below DEA. The MACD histogram was -17.8854, with the green bar persisting and widening notably from -10.2228 the previous day, as the negative gap between DIF and DEA expanded. The futures market exhibited weak characteristics across price, volume, and open interest moving in the same direction.
SMM commentary: As of now, total alumina inventory nationwide continued to increase, with the pace of inventory buildup accelerating somewhat. By segment: aluminum smelter raw material inventory increased somewhat, with downstream stockpiling willingness picking up ahead of the holiday; alumina refinery finished product inventories continued to accumulate, with finished product pressure unabated amid high production levels; port inventory edged down and largely stabilized; in-transit and yard stockpiled inventory increased somewhat; warrant inventory rose slightly. On the industry front, recent weekly alumina production nationwide continued to rise, with growth mainly coming from the sustained release of newly commissioned capacity in Guangxi, coupled with the full recovery of enterprises in Shanxi previously affected by red mud pond issues. Meanwhile, operating rates in Shandong and Henan pulled back somewhat, keeping overall supply high and further aggravating the supply-demand surplus. Futures prices consolidated on a weak note at low levels, market trading activity declined, and both bulls and bears turned cautious and watchful; downstream aluminum smelters mainly purchased as needed, with modest raw material restocking ahead of the holiday and no signs of concentrated stockpiling. Looking ahead, metallurgical-grade alumina operating capacity is expected to remain high, existing capacity is expected to stay stable, and weekly operating rates are expected to continue rising. No maintenance or production cut plans have been reported by enterprises so far. With winter approaching, aluminum smelters will gradually begin stockpiling, and supply pressure is expected to keep growing. On the inventory front, high production and downstream stockpiling are offsetting each other, and total alumina inventory nationwide is expected to continue building after the holiday. On the price front, with the supply-demand surplus unchanged and limited upward momentum, spot prices are expected to remain stable with narrow-range weak fluctuations.
[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 unrelated to Shanghai Metals Market.]
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