Short-Term Aluminium Prices To Move Rangebound, Some Aluminium Capacity In Yunnan May Resume In Late June As Hydropower Generation Has Picked Up

SHANGHAI, Jun 7 (SMM) – Overnight, the most-traded SHFE 2307 aluminium contract opened at 18,050 yuan/mt, with its low and high at 18,015 yuan/mt and 18,105 yuan/mt before closing at 18,070 yuan/mt, down 40 yuan/mt or 0.22%. LME aluminium opened at $2,238/mt on Tuesday, with its low and high at $2,205.5/mt and $2,246/mt respectively before closing at $2,205.5/mt, a drop of $34.5/mt or 1.54%.

On the macro front, the current market generally believes that the Fed may suspend interest rate hike in June to assess the impact of higher interest rates on the economy. I is necessary to pay attention to the inflation data to be released before next week's meeting. Hydropower generation in Yunnan has gradually improved recently. SMM predicts that a small amount of aluminium capacity may be resumed in the province in late June. The overall growth of domestic operating aluminium capacity has been slow. On the demand side, downstream consumption has gradually entered the off-season. However, due to the high proportion of molten aluminium output at smelters, aluminium ingot social inventories continue to drop. Inventory decline may slow down as more cargoes arrive. Short-term aluminium prices are expected to remain rangebound.