SMM Morning Comment For Aluminium Market On November 27

SHANGHAI, November 27(SMM) –

The most-traded SHFE 2401 aluminum contract opened at 18750 yuan/mt last Friday’s night session, with its low and high at 18680 yuan/mt and 18785 yuan/mt before closing at 18745 yuan/mt, down 15 yuan/mt or 0.08%. LME aluminum opened at $2228/mt last Friday, with its low and high at $2213.5/mt and $2228/mt respectively before closing at $2225/mt, up $3/mt or 0.14%.

On the macro level, expectations for further interest rate hikes in the US have cooled, and the U.S. dollar index has weakened, providing support for aluminum prices. In China, favorable domestic policies serve high-quality development of the economy and high-level opening up to the outside world, boosting market confidence and aluminum consumption towards the end of the year. In terms of fundamentals, aluminum ingot inventory has basically entered a downward trend. Due to aluminum production cuts in Yunnan, domestic operating production capacity has dropped to around 41.8 million mt, easing supply-side pressure. However, due to recent exchange rate fluctuations, the import window has shown signs of opening. The inflow of imported goods will add to domestic supply. The performance of downstream operating rates is weak in the off-season. SMM predicts that falling domestic social inventory of aluminum ingots will support aluminum prices at highs.