"'Tariff Stick' Sparks Concerns, SHFE Aluminum Prices Rebound from Bottom [SMM Aluminum Futures Brief]"

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

SMM, February 27:

Today, the most-traded SHFE aluminum 2504 contract opened at 20,650 yuan/mt, with a high of 20,665 yuan/mt and a low of 20,500 yuan/mt, closing at 20,620 yuan/mt, up 0.05%. Trading volume was 12,400 lots, and open interest was 200,000 lots.

SMM Comments: On the macro side, as US President Trump’s aggressive tariff policies sparked inflation concerns, Richmond Fed President Thomas Barkin stated on Tuesday (Eastern Time) that the US Fed might have to raise interest rates to counter economic trends that could drive inflation higher. Fundamentals side, cost-side support continued to weaken; supply side saw slight increases with relatively small overall changes; demand side, impacted by rising aluminum prices, end-users adopted a wait-and-see approach, and shipments from downstream aluminum semis enterprises showed no improvement. The turnover days of raw material inventories at factories struggled to recover, with procurement mainly based on rigid demand and consumption of finished product inventories. Domestic social inventories of aluminum ingots and aluminum billets climbed to 1.194 million mt, surpassing the key thresholds of 1 million mt and 1.1 million mt, and are now approaching 1.2 million mt. Currently, most suppliers are optimistic about aluminum prices in the future and expect that after entering March, the inventory turning point will gradually emerge. With policy support, aluminum ingot inventories are expected to remain low for an extended period, and sentiment of holding back cargoes in the spot market has intensified. Macro sentiment remains unstable, and consumption realization still requires observation, leading the market to cautiously anticipate aluminum price fluctuations and adjustments.

Today, the most-traded alumina 2505 contract opened at 3,347 yuan/mt, with a high of 3,398 yuan/mt and a low of 3,318 yuan/mt, closing at 3,384 yuan/mt, up 0.45%. Trading volume was 130,000 lots, and open interest was 162,000 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 rebounded slightly. However, with the slight rebound in domestic spot alumina prices and the decline in overseas spot alumina prices, the domestic alumina export window has gradually closed. Currently, alumina operating capacity remains at a high level, while 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. Continuous attention should be paid to the alumina export window 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.]