SHFE aluminum edges up, holding above moving averages; alumina rebounds on increased volume, with the repair rally strengthening. [SMM SHFE Aluminum Brief Commentary]

On August 6, SMM reported:

The SHFE aluminum 2609 contract opened at 23,785 yuan/mt today, rose to a high of 23,905 yuan/mt, dipped to a low of 23,740 yuan/mt, and finally settled at 23,810 yuan/mt, up 45 yuan/mt, or 0.19%, from the previous trading day. Trading volume was 143,800 lots, open interest was 239,800 lots, and daily position change was -348 lots. Prices stood above MA5 (23,735), MA10 (23,539.50), MA20 (23,356.50), MA40 (23,364.38) and MA60 (23,740.58), continuing the short-term relatively strong repair pattern. On the MACD indicator, DIFF (91.45) was higher than DEA (-3.93), and the histogram recorded 190.76, still releasing bullish momentum. Trading volume increased compared to the previous trading day, but the daily position change was -348 lots, indicating a minor outflow of funds. The upward momentum of the futures still needs observation.

SMM comment: Indirect technical talks between the US and Iran made progress, with discussions focusing on fund restitution and strait security. Consultations on the nuclear issue are about to begin. The geopolitical risk premium continued to shrink, but disputes over the management rights of the Strait of Hormuz persisted, and uncertainty remained regarding the resumption of navigation in the strait. The US Fed's hawkish pivot boosted the US dollar index, putting pressure on non-ferrous metals prices. Under macro headwinds, aluminum prices fell in China and overseas. In the short term, bearish factors dominated, and aluminum prices are expected to continue to operate in the doldrums.

The alumina 2609 contract opened at 2,671 yuan/mt today, rose to a high of 2,728 yuan/mt, dipped to a low of 2,668 yuan/mt, and finally settled at 2,696 yuan/mt, up 42 yuan/mt, or 1.58%, from the previous trading day. Trading volume was 324,400 lots, open interest was 172,000 lots, and daily position change was -28,054 lots. Prices stood above MA5 (2,651.40), MA10 (2,666.80) and MA20 (2,683.85), but remained below MA40 (2,752.20) and MA60 (2,767.10). The short-term repair momentum strengthened, but medium and long-term pressure persisted. On the MACD indicator, DIFF (-28.58) was higher than DEA (-31.93), and the histogram recorded 6.70. Bearish momentum narrowed significantly and shifted towards short-term repair. Trading volume expanded significantly, but the daily position change was -28,054 lots, indicating a substantial outflow of funds. Today's rise was more a reflection of a short-covering rebound.

SMM comment: According to SMM statistics, as of last Thursday, total domestic alumina inventory edged down WoW. Looking at the inventory structure, raw material inventory at aluminum smelters continued to destock slightly. However, due to recent significant price fluctuations and market divergence on the outlook, the willingness to restock was weak, and end-users mainly adopted a wait-and-see attitude. On-site inventory at alumina refineries decreased, mainly affected by phased maintenance undertaken by some enterprises in the north. Under production constraints, in-factory inventory was consumed as a priority. This impact is expected to gradually fade after the maintenance concludes next week. Port inventories continued to accumulate, with port arrivals from outside China staying high. Imported resources supplemented spot supply, adding pressure on the market. Overall, the oversupply pattern remained unchanged. Before the implementation of Guinea's bauxite ore quota policy, the market lacked significant bullish drivers. Next week, inventory is expected to shift from weak destocking to a slight buildup, with supply and demand remaining loose, and alumina prices are expected to continue consolidating on a weak note.

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