SMM Aluminum Market Morning Comment (July 26)

Market: Overnight, the most-traded SHFE aluminum 2409 contract opened at 19,130 yuan/mt, reaching a high of 19,240 yuan/mt and a low of 19,090 yuan/mt, and closed at 19,180 yuan/mt, up 5 yuan/mt, an increase of 0.02%. The previous trading day, LME aluminum opened at $2,298/mt, hit a high of $2,303/mt and a low of $2,266/mt, and closed at $2,277.5/mt, down $17.5/mt, a decrease of 0.76%.

Summary: On the macro side, China lowered deposit rates, and Canada's rate cut was in line with expectations, leading to increasing global market liquidity. Regional conflict remains volatile. On the fundamentals side, domestic aluminum supply continues to grow, with a significant YoY increase in net imports of primary aluminum. Downstream aluminum processing and end-user demand have entered the off-season, with the operating rate in the aluminum processing industry hitting a low point, and some stimulus measures have yet to show effect. Social inventory is at a three-year high for the same period, and spot discounts persist. On the cost side, there is also a risk of collapse. In the short term, aluminum fundamentals are relatively stable, continuously exerting downward pressure on aluminum prices, while macro fluctuations are relatively large. In the short term, attention should be paid to the impact of macro changes on aluminum prices.