Domestic and Ex-China Aluminum Prices Consolidate at Lows and Recover; Destocking Tailwinds Offset Ex-China Capacity Headwinds [SMM Aluminum Morning Brief]
[SHFE and LME Aluminum Prices: Low-Level Consolidation and Recovery as Destocking Positives Offset Overseas Capacity Negatives]
On the macro front, US June nonfarm payrolls significantly missed expectations, causing the market to push back the timing of Fed rate hikes. A weaker US dollar provided valuation support for nonferrous metals. The US and Iran resumed nuclear talks, and the geopolitical risk premium continued to narrow, to some extent capping the upside room for commodities. Meanwhile, expectations of new overseas aluminum capacity coming on stream formed a medium- and long-term supply bearish factor.
Domestic positives stood out. The proportion of liquid aluminum continued to rise, and aluminum ingot warehouse withdrawals hit a four-year high over the past week. The pace of inventory destocking significantly accelerated, providing support for the bottom of SHFE aluminum.
Amid a mix of bullish and bearish factors, overseas positives from a weaker US dollar and negatives from supply/geopolitics offset each other. LME aluminum, after an earlier oversold decline, saw its downward momentum slow, and in the short term, it mainly undergoes low-level consolidation and recovery. Supported by rapid destocking, the probability of China’s market underperforming LME aluminum is low. SHFE and LME may see slight divergence, and a one-sided weak market is unlikely to persist.
![Domestic and Ex-China Aluminum Prices Consolidate at Lows and Recover; Destocking Tailwinds Offset Ex-China Capacity Headwinds [SMM Aluminum Morning Brief]](https://imgqn.smm.cn/usercenter/SBQYr20251217171651.jpg)
