Macro Factors Intertwined, SHFE Aluminum Hits New High in This Round of Rebound [SMM Aluminum Futures Brief Review]

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

SMM, March 7:

Today, the most-traded SHFE aluminum 2504 contract opened at 20,920 yuan/mt, with a high of 20,970 yuan/mt, a low of 20,810 yuan/mt, and closed at 20,835 yuan/mt, down 0.38%. Trading volume was 81,000 lots, and open interest was 200,000 lots.

SMM Comments: Overseas, the US tariff policy disruptions intensified, with the Midwest premium exceeding $900/mt. While automotive tariffs were exempted, steel and aluminum tariffs remained unchanged. Domestically, the Two Sessions released signals to stabilize the economy, setting a GDP target of 5% and aiming to stabilize the real estate and stock markets. On the macro front, favorable factors supported aluminum prices. Fundamentals side, domestic aluminum production resumed, with capacity expected to be released by the end of March. However, costs rose slightly. As of this Thursday, the immediate full average cost of domestic aluminum was approximately 17,446 yuan/mt, up 408 yuan/mt WoW, mainly due to stable alumina prices this week but significant increases in auxiliary material prices, leading to a slight rebound in aluminum costs. Inventory side, domestic aluminum inventory fell to 871,000 mt during the week, down 15,000 mt WoW, marking the first signal of destocking. Coupled with the "Golden March and Silver April" peak season and the rush for PV installations, aluminum consumption support strengthened. Overall, on the macro front, mixed factors prevailed. Domestic macro support remained consistent, while overseas trade barriers increased, though with high uncertainty, leaving the market in a state of contention. Fundamentals side, both supply and demand showed growth. As the consumption peak season approached, most sectors saw a rebound in order volumes and operating rates. Combined with the initial signs of destocking in aluminum ingot social inventory, strong support for aluminum prices was evident. The most-traded SHFE aluminum contract is expected to trade around 20,500-21,200 yuan/mt next week.

Today, the most-traded alumina 2505 contract opened at 3,287 yuan/mt, with a high of 3,295 yuan/mt, a low of 3,263 yuan/mt, and closed at 3,268 yuan/mt, down 0.58%. Trading volume was 41,000 lots, and open interest was 192,000 lots.

SMM Comments: Recently, domestic spot alumina prices have stopped falling, mainly due to increased demand for alumina exports and transfer to delivery warehouse, which boosted alumina prices. In the short term, spot alumina prices in some regions rebounded slightly. However, overseas alumina prices declined, effectively closing the export window. Alumina transfer to delivery warehouse cannot provide sustained demand, and the market expects some new alumina capacity to gradually come online. In the medium and long term, spot alumina prices remain under pressure. In the short term, spot alumina prices may enter a phase of fluctuation and adjustment. Continuous attention is needed on alumina export profitability and changes in bauxite 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.]