SMM Morning Comment For Aluminium Market On August 1

SHANGHAI, Aug 1 (SMM) –Overnight, the most-traded SHFE 2309 aluminium contract opened at 18,490 yuan/mt, with its low and high at 18,460 yuan/mt and 18,620 yuan/mt before closing at 18,600 yuan/mt, up 240 yuan/mt or 1.31%. LME aluminium opened at $2,225/mt on Monday, with its high and low at $2,289/mt and $2,223.5/mt respectively before closing at $2,287/mt, an increase of $60/mt or 2.69%.

On the macro front, there are increasing expectations that the policy tightening of major overseas central banks are coming to an end. China continued to issue notices on measures to restore and expand consumption, boosting market sentiment. In terms of fundamentals, the resumption of aluminium production in Yunnan is accelerating. It is expected that some large aluminium enterprises in the region will be able to produce at full capacity by the end of August, and the total domestic operating capacity will hit a new high. However, the current resumption of production is mainly liquid aluminium, posing little risk of imminent oversupply of aluminium ingots. Due to the increase in arrivals over the past weekend, SMM statistics showed that the aluminium ingot inventory accumulated slightly on July 31, while the aluminium billet stocks continued to fall. On the demand side, consumption related to real estate and automobiles has gradually picked up under favorable policies, and downstream operating rates have improved. However, some downstream sectors are still in the off-season. The impact of follow-up policies still needs further observation. In the short term, aluminium prices will remain volatile, and attention will be paid to consumption and inventory in the future.