Alumina Prices Continue to Decline While SHFE Aluminum Slightly Rises [SMM Aluminum Futures Brief]

》Check SMM Aluminum Product Prices, Data, and Market Analysis

SMM, January 16:

Today, the most-traded SHFE aluminum 2503 contract opened at 20,200 yuan/mt, with a high of 20,425 yuan/mt, a low of 20,180 yuan/mt, and closed at 20,300 yuan/mt, up 0.67%. Trading volume was 174,000 lots, and open interest was 187,000 lots.

SMM Comments: Overnight customs data boosted expectations for US Fed interest rate cuts. Coupled with continuous efforts by the Chinese government to stimulate consumption, aluminum prices were lifted. On the fundamentals side, aluminum capacity remained stable, while spot alumina prices continued to decline due to stable supply, leading to weaker cost support for the aluminum industry. On the demand side, as the Chinese New Year approaches, market demand weakened, and operating rates in the aluminum processing industry declined steadily. Some aluminum processing plants are nearing holiday shutdowns. Although pre-holiday concentrated restocking led to an unexpected inventory reduction, temporarily supporting aluminum prices, the sustainability of this trend is expected to be limited. In the short term, attention should remain on the impact of spot alumina price pullbacks on aluminum costs, as well as the downstream holiday schedules and the continuity of pre-holiday restocking.

Today, the most-traded alumina 2502 contract opened at 3,795 yuan/mt, reached a high of 3,830 yuan/mt, a low of 3,671 yuan/mt, and closed at 3,703 yuan/mt, down 3.74%. Trading volume was 246,000 lots, and open interest was 94,000 lots.

SMM Comments: Recently, weekly operating rates for alumina have continued to increase slightly, while demand remained relatively stable. With low-price transactions gradually emerging in the market, some suppliers have become more active in selling, leading to an increase in the availability of spot alumina in the market and a widening discount of spot transactions compared to online prices. In the short term, some alumina capacity in Shanxi is expected to resume production, with supply anticipated to increase. On the demand side, aluminum operating rates remain relatively stable. The alumina fundamentals are expected to maintain a slight surplus, and spot alumina prices may continue their downward trend in the short term.

[The information provided is for reference only. This article does not constitute direct investment research advice. Clients should make cautious decisions and not replace independent judgment with this information. Any decisions made by clients are not related to SMM.]