SMM Aluminum Market Morning Comment (Jan 10)

Overnight, the most-traded SHFE 2402 aluminum contract opened at 18,980 yuan/mt, with high and low at 19,090 yuan/mt and 18,980 yuan/mt before closing at 19,040 yuan/mt, down 70 yuan/mt or 0.37%. LME aluminum opened at $2,239/mt on Tuesday, with its high and low at $2,257.5/mt and $2,227/mt respectively before closing at $2,242/mt, an increase of $5/mt or 0.22%.
From a macro perspective, the U.S. dollar rose 0.22% overnight, and the market awaited inflation data due to be released on Thursday for clues on when the Federal Reserve may cut interest rates. The consumer price inflation report in December is the main economic data of the week. If inflation continues to slow, it may intensify expectations for a rate cut in March. In terms of fundamentals, as the the disturbance in the alumina supply faded, the domestic aluminum production entered a period of stable operation, with no significant fluctuations in the short term; as for demand, aluminum downstream operating rates continued to be weak, and the amount of aluminium ingot produced was expected to increase MoM. Domestic aluminum ingot inventories continued to grow, suppressing SHFE aluminum. Short-term aluminum prices will remain volatile, and we need to pay close attention to the pace of the Federal Reserve's interest rate cuts, domestic consumption and inventory changes.