The US Fed's Hawkish Stance Overnight, SHFE Aluminum Rebounded Slightly [SMM Aluminum Morning Briefing Nov 15]

Overnight, the most-traded SHFE aluminum 2412 contract opened at 20,635 yuan/mt, reaching a high of 20,855 yuan/mt and a low of 20,635 yuan/mt, closing at 20,770 yuan/mt, up 100 yuan/mt or 0.48% from the previous close. The trading volume was 56,400 lots, and the open interest was 142,500 lots, with a daily reduction of 3,900 lots. On the previous trading day, LME aluminum opened at $2,529.5/mt, hitting a high of $2,563/mt and a low of $2,485/mt, closing at $2,523.5/mt, down $7/mt or 0.28%.

Summary: Macro side, the US October PPI annual rate was slightly higher than expected, coupled with the initial jobless claims for the week hitting a six-month low, the US dollar index maintained an upward trend, and base metals remained under pressure. Late at night, US Fed officials delivered hawkish remarks, indicating no rush to cut interest rates, leading the market to reduce bets on a December rate cut. Domestically, new housing policies were introduced, with increased deed tax discounts and VAT exemptions expected to boost the real estate sector. Supply side, transportation in north-west China improved during the week, interrupting the continuous destocking trend of aluminum ingot inventory, forming an initial inventory inflection point. Low inventory may gradually weaken support for aluminum futures prices. Alumina spot supply remained tight, coupled with production cuts or suspensions by some enterprises. However, recent official statements regarding the alumina market led to a decline in alumina futures sentiment, resulting in a divergence between futures and spot prices. Overall, domestic aluminum remains at low inventory levels with rising costs, but the support strength has weakened. Aluminum prices are expected to consolidate next week.