SMM Daily Aluminium Market Comment and Forecast

SHANGHAI, Apr 26 (SMM) - After opening at 18,690 yuan/mt at yesterday’s night session, the most-traded SHFE 2306 aluminium contract rose initially to 18,745 yuan/mt, but then fell back to 18,610 yuan/mt before closing at 18,650 yuan/mt, down 150 yuan/mt or 0.8%. LME aluminium opened at $2,381/mt on Tuesday and closed at $2,331/mt, down 2.1%.

On the macro level, the market generally expects the Fed to raise interest rates by 25 basis points at next week's meeting, but sluggish consumer confidence index and decline in US manufacturing industry data led to risk aversion. On the fundamentals, April is still the peak season for downstream consumption, and the domestic aluminium ingot social inventory remains in a destocking state. Although aluminium price has dropped below 19,000 yuan/mt, high prices still deterred buyers. Downstream buyers have not shown strong willingness to stock before the upcoming Labour Day holiday. And risk aversion may emerge before the holiday. As such, SHFE aluminium likely to move rangebound. It is necessary to continue to pay attention to whether smelters in Yunnan will curtail capacity.