SMM Aluminum Market Morning Comment (Apr 23)

Overnight, the most-traded SHFE 2406 aluminum contract opened at 20,500 yuan/mt, with high and low at 20,605 yuan/mt and 20,455 yuan/mt before closing at 20,530 yuan/mt, down 45 yuan/mt or 0.22%. LME aluminum opened at $2,661/mt yesterday, with its high and low at $2,688/mt and $2,648.5/mt respectively before closing at $2,658/mt, down $2.5/mt or 0.09%.

On the macro front, the market was waiting for the US Personal Consumption Expenditure (PCE) price index report to be released on Friday for clues on the prospects for US interest rate cuts. Risky assets and non-US monetary experienced an increase in volatility. In addition, the situation in Middle East intensified. The UK and the US imposed sanctions on Russian metals, and Biden called for a 25% tariff on China’s aluminum semis, triggering turbulence in global metals market. The domestic aluminum supply rose further, but downstream demand still needs more stimulation from terminal consumption. The inventory of aluminum billets and aluminum ingots remained high. However, the domestic market prices may fluctuate at a high level amid global aluminum trade friction.