Overnight, the most-traded SHFE 2404 aluminium contract opened at 18,675 yuan/mt, with high and low at 19,070 yuan/t and 18,655 yuan/mt before closing at 19,070 yuan/mt, up 1.95%. LME aluminium opened at $2,195.5/mt on Tuesday, with its low and high at $2,180/mt and $2,236/mt respectively before closing at $2,223.5/mt, up 1.21%.
Summary: During the CNY holiday, on the macro front, the US economic data in January exceeded expectations, and Fed's interest rate cut expectations were postponed again. Market sentiment has not yet been fully digested, but new domestic policies have been implemented one after another. LPR dropped significantly amid loose financial market. The implementation of real estate financing projects has accelerated, 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 YoY decrease and a historical low in the past six years. With work and production continuing to resume after CNY holiday, the demand is expected to pick up, supporting the aluminium prices.
