SHFE Aluminum Rises Amid Position Reductions, Short-Term Recovery; Alumina Rebound Limited [SMM Aluminum Briefing]

SMM July 8:

Today, the SHFE aluminum 2608 contract opened at 22,940 yuan/mt, rose to a high of 23,140 yuan/mt, dipped to a low of 22,940 yuan/mt, and settled at 23,075 yuan/mt, up 155 yuan/mt or 0.68% from the previous trading day. Trading volume was 148,400 lots, and open interest was 232,000 lots, with a daily change of -14,047 lots. The price stood above the 5-day MA (22,828) and 10-day MA (22,802.50), but remained below the 20-day MA (23,378.75), 40-day MA (23,943.13), and 60-day MA (24,261.75). The short-term recovery continued, but the medium and long-term weak trend has not been reversed. On the MACD indicator, DIFF (-408.99) was slightly above DEA (-409.92), and the histogram recorded 1.86, indicating that bearish momentum clearly narrowed. Trading volume remained low, and the daily change in open interest of -14,047 lots showed continued capital outflow. Today's rise was still mainly driven by short-covering.

SMM Comment: The indirect technical talks between the US and Iran made progress, with discussions around fund returns and strait security, and nuclear consultations are about to start. The geopolitical risk premium continued to converge. Although disputes over the management of the Strait of Hormuz persisted, the resumption of strait navigation still faced uncertainties. The US Fed's hawkish shift boosted the US dollar index, and base metal prices were pressured. Under macro headwinds, aluminum prices in and outside China fell. In the short term, bearish factors dominate, and aluminum prices are expected to remain in the doldrums.

Today, the alumina 2609 contract opened at 2,701 yuan/mt, rose to a high of 2,725 yuan/mt, dipped to a low of 2,692 yuan/mt, and settled at 2,716 yuan/mt, up 10 yuan/mt or 0.37% from the previous trading day. Trading volume was 174,800 lots, and open interest was 346,300 lots, with a daily change of -6,243 lots. The price remained below the 5-day MA (2,718), 10-day MA (2,760.80), 20-day MA (2,829.25), 40-day MA (2,810.70), and 60-day MA (2,814.22). All moving averages maintained a bearish alignment, and the weak futures pattern has not been repaired yet. On the MACD indicator, DIFF (-33.35) was below DEA (-15.92), and the histogram recorded -34.86, indicating that bearish momentum still existed. Trading volume pulled back slightly, and the daily change in open interest of -6,243 lots showed some capital outflow. Today's rebound was more of a short-covering repair at low levels, with sustained upward momentum remaining insufficient.

SMM Comment: According to SMM statistics, as of last Thursday, total alumina inventory in China edged down WoW. By inventory structure, aluminum smelter raw material inventory continued to destock slightly, but due to large price fluctuations recently and market divergence on the outlook, restocking willingness was weak, and end-users mainly stood on the sidelines. In-factory alumina inventory fell, mainly affected by some enterprises in the north conducting scheduled maintenance, where production constraints led to priority consumption of in-factory inventory. It is expected that after maintenance ends next week, this impact will gradually fade. Port inventory continued to accumulate, with ex-China port arrivals remaining high. Imported resources supplemented spot supply and increased market pressure. Overall, the oversupply pattern has not changed. Before Guinea's bauxite quota policy is implemented, the market lacks a clear bullish catalyst. It is expected that next week, inventory will shift from weak destocking to slight buildup, supply-demand will remain loose, and alumina prices will continue to consolidate on a weak note.

[The information provided is for reference only. This article does not constitute direct investment research advice. Clients should make decisions prudently and not use this as a substitute for independent judgment. Any decisions made by clients have no connection with SMM.]