Aluminum Prices Maintain Fluctuating Trend, Focus on Recent Changes in Domestic and International Macro Sentiment [SMM Aluminum Morning Meeting Summary Oct 17]

Overnight, the most-traded SHFE aluminum 2411 contract opened at 20,755 yuan/mt, reaching a high of 20,800 yuan/mt and a low of 20,735 yuan/mt, and closed at 20,780 yuan/mt, up 75 yuan/mt or 0.36% from the previous close. On Wednesday, LME aluminum opened at $2,585/mt, hitting a high of $2,601.5/mt and a low of $2,571/mt, and closed at $2,587.5/mt, up $16/mt or 0.62%.

Summary: On the macro front, data released by the US Department of Labor on Wednesday showed that import prices fell by 0.4% last month, the largest decline since December 2023, due to a significant drop in energy product prices. This suggests an improved inflation outlook, and the US Fed is expected to continue cutting interest rates. Traders currently see a 97% chance of a 25 basis point rate cut in November and a 3% chance of a pause. Domestically, a State Council press conference will be held at 10 a.m. today, with the market hoping for more support for the real estate sector from China. On the fundamentals side, domestic aluminum supply continues to increase slightly. On the cost side, the spot alumina market remains tightly balanced, and domestic aluminum production costs are expected to increase in October. On the demand side, downstream operating rates are generally stable, with inventory falling back to pre-holiday levels during the week, and market liquidity remains tight. Overall, the supply-demand mismatch in the aluminum market is not significant, and a short-term fluctuating trend is expected to be maintained, with attention to changes in domestic and international macro sentiment and end-use consumption.