The macro front remained bearish. Fed governor said interest rate cuts should be carried out cautiously and orderly. The People's Bank of China renewed MLF by an excess amount for the 14th consecutive month instead of cutting interest rates, dashing market expectations for interest rate cut. In monetary markets, European Central Bank also postponed the date for the first interest rate cut from April to June, and then European Central Bank President Christine Lagarde said a rate cut may come in the summer. The unexpected rebound in UK CPI data in December also cooled expectations for an interest rate cut by the Bank of England. Although some China economic data released were better than expected, it was insufficient to offset the rapid cooling of expectations for interest rate cuts, which put pressure on aluminium prices.
Fundamentals: Domestic aluminium production enterprises maintained steady operations last week, and shipments were smooth. The aluminium liquid ratio declined slightly during the week, mainly due to a slight increase in aluminium ingot production in Henan, Yunnan and other places. The total domestic operating capacity is approximately 42 million mt. Cost: The alumina prices stopped rising during the week, and the market was in a stalemate. The short-term price may keep unchanged. The immediate cost of domestic aluminium remained at around 16,850 yuan/mt. Affected by the drop in aluminium spot prices, the industry real-time profit narrowed to 2,034 yuan/mt. In terms of aluminium ingots, the domestic primary aluminium import window opened during the week, causing imported aluminium to flood into the mainstream spot market. According to customs data, 323,400 mt of unwrought aluminium and aluminium semis were imported in December, up 25.2% YoY. In 2023, the import volume was 3.0599 million mt, up 28.0% YoY. It is expected that the total import volume of primary aluminium in January will still exceed 150,000 mt. In terms of demand, domestic aluminium downstream operating rate was largely stable during the week. As environmental protection production restrictions in Henan eased, many aluminium plate/sheet and strip factories in Chang’ge and Gongyi resumed operations, improving the operating rates slightly. There were few new orders in the aluminium extrusion industry, but as the Chinese New Year (CNY) drawing near, many industries have increased finished product inventories and raw material inventories, reducing the social inventory of domestic aluminium, and driving spot premiums to gradually expand.
From a macro perspective, MoM surge in US retail sales in December exceeded market expectations and stood at 0.6% (0.40% expected). Sales of motor vehicles, personal health care and catering still maintained high YoY growth. Residential consumption were resilient. The market's expectations for Fed’s interest rate cut in the first quarter fell back, the US dollar index rebounded, and commodities were under pressure. Domestically, China’s GDP grew by 5.2% in 2023. In December, total retail sales increased by 7.4% YoY, and the growth rate of added value in industries above the designated size hit a 22-month high. Real estate remained weak, manufacturing investment rebounded, and the overall macroeconomic atmosphere at home and abroad is weak. In terms of fundamentals, domestic aluminium supply has entered a stable period, primary aluminium import windows continue to open, and the net import volume of primary aluminium remains at a high level, impacting domestic market to a certain extent. Domestic primary aluminium social inventories may enter a seasonal inventory accumulation cycle at the end of the month, but considering the industry's aluminium liquid conversion rate of around 70%, it is expected that the total inventory before the CNY holidays this year will be far lower than the same period last year. In the short term, the macro data at home and abroad perform poorly amid market pessimism, and the domestic aluminium downstream enters the off-season, weighing on the aluminium prices. It is expected that the most-traded SHFE aluminium may fluctuate between 18,470-19,350 yuan/mt this week. LME aluminium may move rangebound at $2,100-2,280/mt, and we still need to pay attention to the macroeconomic changes and domestic inventory changes in the future.
![A00 sedikit terkoreksi, scrap aluminium tetap stabil secara keseluruhan [Tinjauan Harian Scrap Aluminium]](https://imgqn.smm.cn/usercenter/yOYEC20251217171653.jpg)
![[Tinjauan Harian Harga ADC12] Harga aluminium berjangka berfluktuasi di level tinggi; ADC12 spot menguat](https://imgqn.smm.cn/usercenter/FHiZE20251217171722.jpeg)
