SMM Morning Comment For Aluminium Market On November 2

SHANGHAI, November 2 (SMM) –

Overnight, the most-traded SHFE 2312 aluminum contract opened at 19265 yuan/mt, with its low and high at 19190 yuan/mt and 19265 yuan/mt before closing at 19205 yuan/mt, down 30 yuan/mt or 0.16%. LME aluminum opened at $2246/mt on Wednesday, with its low and high at $2233.5/mt and $2257/mt respectively before closing at $2242.5/mt, down 0.16%.

There is still great uncertainty in overseas macro front. U.S. economic data shows that the U.S. economy is resilient. The U.S. dollar index fluctuates at a high level, suppressing commodities. China has announced to issue an additional one trillion yuan of local government bonds, which could boost the economy and market. In terms of fundamentals, some aluminum billet factories have recently reduced production, the industry's ingot casting volume has increased month-on-month. There are expectations for production reduction by aluminium smelters in Yunnan. The domestic aluminum supply will remain high in short-term. And imported ingots continue to enter China. Downstream consumption is switching from peak season to off-season. Destocking of aluminum ingot social inventory is not smooth. In the short term, aluminum prices may remain rangebound. We need to pay attention to domestic aluminum inventories and downstream consumption in the future.