SMM Aluminum Market Morning Comment (Mar 11)

At last Friday’s night session, the most-traded SHFE 2404 aluminum contract opened at 19,195 yuan/mt, with its lowest and highest at 19,120 yuan/mt and 19,225 yuan/mt before closing at 19,140 yuan/mt, down 70 yuan/mt or 0.36%. LME aluminum opened at $2,246.5/mt last Friday, with its high and low at $2,267/mt and $2,233.5/mt respectively before closing at $2,236/mt, down $16/mt or 0.71%.

Summary: On the macro front, the interest rate cut speeches of European Central Bank officials have been intensive. China's February CPI data turned from a YoY decline to an increase and is higher than expected, bringing bullish expectations to the market. Fundamentally, China's aluminum production increased by 7.81% YoY in February, and the operating rate of aluminum plate/sheet, strip and foil declined YoY. The fundamentals are insufficient to provide upward momentum for aluminum prices. In the short term, we need to pay close attention to recovery in consumption during the peak season and the fluctuation of expectations for overseas interest rate cuts.