Alumina Rebounds with Reduced Positions, SHFE Aluminum Fluctuates Downward, Moves Downwards After a Higher Opening [SMM Aluminum Futures Brief Review]

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

SMM, February 17:

Today, the most-traded SHFE aluminum 2504 contract opened at 20,705 yuan/mt, with a high of 20,715 yuan/mt and a low of 20,610 yuan/mt, closing at 20,660 yuan/mt, down 0.31%. Trading volume was 77,000 lots, and open interest was 215,000 lots.

SMM Comments: On the macro front, last Friday, the US January "scary data" unexpectedly plunged, with January retail sales MoM at -0.9%, marking the largest drop since January 2024. US Treasury yields plummeted to a one-week low, and the US dollar index accelerated its decline to a two-month low. The US steel and aluminum tariff policy spurred a surge in US aluminum premiums, raising expectations of inventory transfers to the US. Last Friday, overseas aluminum prices strengthened again, providing some support to SHFE aluminum. Brazilian President Lula stated that Brazil would take reciprocal measures to counter US steel and aluminum tariffs. In January, China's social financing scale increased by 7.06 trillion yuan, 583.3 billion yuan more than the same period last year; new RMB loans in January reached 5.13 trillion yuan, exceeding expectations; and M2 money supply grew 7% YoY. On the fundamentals side, the aluminum supply side faced renewed pressure from restarts, with domestic operating capacity expected to rise slowly in February. The average spot alumina price continued to weaken, driving aluminum costs further downward. As of now, aluminum costs have fallen below 17,200 yuan/mt, with industry profits exceeding 3,300 yuan/mt. On the inventory side, consumption has not fully recovered, and the market remains in a post-holiday inventory buildup phase, which may continue this week. However, overall inventory pressure remains relatively small. On the demand side, consumption is recovering, with downstream sectors largely resuming operations, though recovery varies across segments. In the future, as PV demand increases and end-users fully resume production, while supply growth remains limited, aluminum prices are expected to maintain a short-term high-level fluctuation.

Today, the most-traded alumina 2505 contract opened at 3,378 yuan/mt, with a high of 3,430 yuan/mt and a low of 3,366 yuan/mt, closing at 3,412 yuan/mt, up 1.31%. Trading volume was 109,000 lots, and open interest was 163,000 lots.

SMM Comments: Overall, on the supply side, some alumina refineries in northern China reported maintenance this week, which may slightly impact short-term alumina supply. On the demand side, some aluminum operating capacity undergoing technological transformation in Sichuan and other regions may gradually restart, increasing demand for alumina. On the cost side, due to the sharp decline in spot alumina prices, alumina refineries have significantly reduced their acceptance of high-priced bauxite, leading to lower quotes from bauxite holders and a decline in imported bauxite prices. Alumina production costs may decrease accordingly. However, the current spot alumina transaction price in northern China is below the theoretical marginal production cost. Overall, large-scale alumina production cuts have not yet occurred. Coupled with profit compression, alumina costs are expected to decline further. The spot alumina market remains relatively well-supplied, and spot transaction prices continue to fall, with a short-term downward trend likely to persist.

[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.]