SMM Morning Comment For Aluminium Market On August 7

SHANGHAI, Aug 7 (SMM) –

Last Friday night, the most-traded SHFE 2309 aluminium contract opened at 18,460 yuan/mt, with the lowest and highest prices at 18,440 yuan/mt and 18,530 yuan/mt before closing at 18,520 yuan/mt, up 15 yuan/mt or 0.08% from the previous trading day. LME aluminium opened at $2,224/mt last Friday, with its high and low at $2,224 /mt and $2,205/mt respectively before closing at $2,239/mt, an increase of $15/mt or 0.7% from the previous trading day.

On the macro front, the US private employment data enhanced expectations for the Fed’s interest rate hike, and the US dollar index rebounded, weighing down the overall non-ferrous metals. In order to boost demand, there may be more favorable policies to be poured out in China in the future. Fundamentally, as supply in Yunnan increased rapidly, aluminium supply pressure may gradually emerge. Due to floods and other factors in the north during the week, fewer aluminium ingot arrivals were reported, and aluminium social stocks shrank. Orders in some downstream sectors improved, but was not insufficient to boost aluminium consumption significantly. In the short term, low aluminium ingot social inventory may give a bottom support for aluminium prices, but the positive macro sentiment has faded. A possible fall in aluminium prices may be felt from supply increase and demand sluggishness. It is expected that the most-traded SHFE aluminium contract will fluctuate at 18,000-18,700 yuan/mt in the week ending August 11, while LME aluminium will run at $2,180-2,270/mt. Changes on consumption and inventory will deserve to be monitored.