SMM Aluminium Market Morning Comment (Feb 28)

Overnight, the most-traded SHFE 2404 aluminium contract opened at 18,845 yuan/mt, with high and low at 18,880 yuan/mt and 18,800 yuan/mt before closing at 18840 yuan/mt, up 5 yuan/mt or 0.03%. LME aluminium opened at $2,185/mt on Tuesday, with its high and low at $2,208.5/mt and $2,185/mt respectively before closing at $2,200/mt, up $18/mt or 0.82%.

Summary: From a macro perspective, US dollar index moved rangebound as investors awaited more US economic data. Inflation data to be released later this week may provide more information on when the Fed will start cutting interest rates. Fundamentally, an aluminium smelter in Inner Mongolia is now resuming production after power outage forced it to shut down on Monday, and the amount of production reduction needs to be confirmed. On the demand, aluminium downstream enterprises are steadily resuming production, with short-term operating rates recovering. The seasonal inventory growth of aluminium ingots continues, but the total volume is at a low level for the same period in recent years, which provides certain support for aluminium prices. However, the aluminium ingots supply increased, which coupled with recent opening of import window may inhibit the upward room of aluminium prices. Overall, aluminium prices continued to fluctuate, and we need to pay attention to aluminium supply, recovery of consumption, and the inventory decline of aluminium ingot and aluminium billets.