Inflation data rebound supports US Fed interest rate cut expectations; macro sentiment boosts aluminum prices [SMM Aluminum Morning Meeting Summary Oct 14]

SMM, Oct 14: Last Friday night, the most-traded SHFE aluminum 2411 contract opened with a gap at 20,940 yuan/mt, reaching a high of 20,990 yuan/mt and a low of 20,875 yuan/mt, closing at 20,955 yuan/mt, up 130 yuan/mt, a 0.62% increase. Last Friday, LME aluminum opened at $2,592/mt, with a high of $2,663/mt and a low of $2,588.5/mt, closing at $2,638/mt, up $47/mt, a 1.81% increase.

Summary: Macro front, September inflation data rebound supports the US Fed's interest rate cut expectations for next month. Domestically, the Ministry of Finance made a significant announcement, indicating substantial borrowing space and plans to introduce a package of incremental policies. Fundamentals side, the expectations for production cuts in Yunnan for Q4 have decreased, along with the release of some new and resumed capacity, leading to continued growth in domestic aluminum supply. Cost side, the spot alumina market remains in tight balance, making it difficult for domestic aluminum costs to decline. Demand side, downstream operations are generally stable, but feedback indicates weak demand growth, which may affect future operations. Overall, the aluminum market's supply-demand mismatch is not prominent, and with domestic and international positive factors and rising costs, short-term fluctuations are expected to be upward. Future attention should be paid to domestic consumption and changes in international macro sentiment.