Supply-Side Disruptions Decrease, SHFE Aluminum Fluctuates Slightly [SMM Aluminum Futures Brief Review]

》Check SMM Aluminum Product Quotes, Data, and Market Analysis

SMM, January 21:

Today, the most-traded SHFE aluminum 2503 contract opened at 20,440 yuan/mt, with a high of 20,490 yuan/mt, a low of 20,375 yuan/mt, and closed at 20,415 yuan/mt, down 0.17%. Trading volume was 104,000 lots, and open interest was 201,000 lots.

SMM Comments: Macro side, on January 20, Trump officially took office and announced that no new tariffs would be imposed immediately. Affected by the news, the US dollar index hit a low of 108.27, boosting base metals. Fundamentals side, supply-side disruptions decreased, and with sufficient supply, the cost side of the aluminum industry eased significantly. As of yesterday, the domestic immediate full average cost of aluminum fell back to around 19,000 yuan/mt. Specifically, alumina costs accelerated downward over the past week, and the market's willingness to purchase high-priced alumina weakened. Spot alumina prices are expected to continue pulling back, weakening cost support for aluminum. Demand side, with the Chinese New Year holiday approaching, aluminum processing plants began to shut down gradually during the week, leading to a noticeable weakening in demand. Social inventories may enter the Chinese New Year inventory buildup cycle. In the short term, attention should focus on the pace of changes in domestic and overseas macro sentiment, the impact of falling spot alumina prices on aluminum costs, as well as downstream shutdowns and the continuity of pre-holiday restocking.

Today, the most-traded alumina 2502 contract opened at 3,832 yuan/mt, with a high of 3,862 yuan/mt, a low of 3,752 yuan/mt, and closed at 3,798 yuan/mt, down 1.96%. Trading volume was 169,000 lots, and open interest was 63,000 lots.

SMM Comments: Recently, the weekly operating rate of alumina continued to increase slightly, with no significant changes on the demand side. Low-priced spot transactions were frequent in the market, and the decline widened compared to earlier periods. In Henan, spot transaction prices on Thursday were 4,050 yuan/mt, down 830 yuan/mt from last Thursday's 4,880 yuan/mt. However, as of now, alumina capacity has not entered a large-scale loss-making state. Alumina supply is expected to maintain high operating rates in the short term, with supply and demand fundamentals remaining in a slight surplus. Overall, spot alumina prices are expected to continue their downward trend in the short term. Close attention should be paid to bauxite transaction prices, alumina costs, and overseas spot alumina prices.

[The information provided is for reference only. This article does not constitute direct investment research advice. Clients should make cautious decisions and not substitute this for independent judgment. Any decisions made by clients are unrelated to SMM.]