SMM Aluminum Market Morning Comment (July 4)

Overnight, the most-traded SHFE aluminum contract 2408 opened at 20,530 yuan/mt, reached a high of 20,550 yuan/mt, a low of 20,475 yuan/mt, and closed at 20,475 yuan/mt, down 15 yuan/mt, a decrease of 0.07%. The previous trading day, LME aluminum opened at $2,516/mt, reached a high of $2,561.5/mt, a low of $2,514.5/mt, and closed at $2,549.5/mt, up $33.5/mt from the previous close, an increase of 1.33%.

On the macro front, data released on Wednesday indicated that the US economy is slowing down, hitting the dollar. Lower-than-expected economic data strengthened expectations that the US Fed may start cutting interest rates later this year. The market is currently awaiting the non-farm payroll report to be released on Friday to further clarify the path of US rate cuts. Fundamentally, domestic aluminum supply continues to grow; the arrival of the off-season for consumption weakened the operating rate of downstream aluminum producers, and aluminum ingot inventory remains at a high level for the same period. Spot prices maintain discounts. In the short term, aluminum prices are expected to move rangebound. In the near term, we need to continue to focus on the US Fed's rate cut process, domestic consumption performance, and inventory changes.