China-U.S. Trade Attracts Attention; SHFE Aluminum Pulled Back Sharply Today [SMM Aluminum Futures Brief]

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

SMM, February 24:

Today, the most-traded SHFE aluminum 2504 contract opened at 20,760 yuan/mt, with a high of 20,875 yuan/mt and a low of 20,635 yuan/mt, closing at 20,690 yuan/mt, down 0.89%. Trading volume was 168,000 lots, and open interest was 238,000 lots.

SMM Comments: On the macro side, the potential new trade agreement between China and the US has drawn continuous market attention. Fundamentals side, cost side support continued to weaken; supply side remained stable with slight increases, with overall changes being relatively small; demand side, driven by rising aluminum prices, end-users adopted a wait-and-see approach, while shipments from downstream aluminum semis enterprises showed no significant improvement. Factory raw material inventory turnover days struggled to rebound, with restocking mainly based on rigid demand and consumption of finished product inventories. Inventory-wise, weekly inventories in major aluminum consumption regions tracked by SMM recorded 845,000 mt, with an inventory buildup of 27,000 mt. The absolute inventory level continued to rise, but the growth rate slowed. Currently, most suppliers are optimistic about the aluminum market outlook and expect that after entering March, the inventory turning point will gradually emerge. With policy support, aluminum ingot inventories are expected to remain at low levels for an extended period, and sentiment of holding back cargoes in the spot market has intensified. Under the scenario of strong expectations but weak reality, aluminum prices, driven by macro sentiment and trading expectations, are more likely to rise than fall.

Today, the most-traded alumina 2505 contract opened at 3,410 yuan/mt, with a high of 3,426 yuan/mt and a low of 3,354 yuan/mt, closing at 3,402 yuan/mt, down 1.28%. Trading volume was 172,000 lots, and open interest was 167,000 lots.

SMM Comments: Recently, there have been reports of minor alumina production cuts and maintenance in northern regions, coupled with concentrated news of domestic alumina exports, which have boosted alumina prices and improved market sentiment. This week, spot alumina prices stabilized after declining. However, operating capacity for alumina remains at a high level, and the incremental demand for aluminum is limited. The fundamental structure has not been completely reversed, and resistance at the top of alumina prices persists. In the short term, alumina prices may enter a phase of fluctuation and adjustment. Moving forward, attention should be paid to the export window for alumina and changes in alumina operating capacity.

[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 not related to SMM.]