SMM Aluminum Market Morning Comment (Feb 19)

LME aluminum opened at $2,220/mt last Friday, with its high and low at $2,238/mt and $2,214/mt respectively before closing at $2,217.35/mt, down by $6.5/mt or 0.29%.

Summary: On the macro front, the US CPI and PPI data in January exceeded expectations during the CNY. The Fed's interest rate cut expectation has not yet been implemented. The US dollar index fluctuates at a high level. However, new social financing and RMB loans hit a record high, and the financial market was loose, boosting market confidence. In terms of fundamentals, upstream aluminium smelters continued to produce, pushing up aluminium ingot inventory accumulation after CNY. However, the accumulation of aluminium ingots during CNY was less than expected, with a significant year-on-year decrease and a historical low in the past six years. On the whole, overseas interest rate cuts have not been implemented, but favourable domestic macroeconomic policies boosted market confidence. Although the aluminium market entered a traditional inventory accumulation, the extent is not as large as in previous years. Downstream processing companies resumed production and demand gradually picked up, which may support aluminium prices after CNY.