Aluminium Ingot January Production Analysis & February Forecast

According to SMM's research findings, Yunnan Province is currently experiencing a dry season, with hydropower contribution remaining at a relatively low level. Enterprises have no immediate plans for production resumption and await clearer policy guidance from the power sector.

The implementation of Indonesia's ban on bauxite exports since June last year has led to bauxite surplus, brought challenges to consume domestically as the Indonesia's alumina plants have limited capacity. Ronald Sulistyanto, Chairman of the Indonesian Bauxite and Iron Ore Entrepreneurs Association (Asosiasi Pengusaha Bauksit dan Bijih Besi Indonesia - APB3I), highlighted the struggle to secure external investment for alumina plant projects, while some entrepreneurs are forced to cut costs or halt production. However, there is hope for relief through potential relaxation of the export ban policy. Efforts are underway to boost alumina production capacity, although challenges persist in addressing the surplus bauxite issue.

LME aluminum is expected to fluctuate widely in the 5 and 20-day moving averages on Monday, with price between USD 2,135-2,165/mt.

n Thursday, eyes should be on UK’s 2Q GDP after being revised, US initial jobless claims and existing home sales for July.

LME zinc market has slid below the 5-day moving average, and investors are advised to take cautious attitude due to US economy uncertainties and the upcoming global central bank annual meeting. 

On Thursday, LME aluminum is estimated to trade widely between USD 2,085-2,120/mt, and SHFE aluminum may challenge new highs, with price between RMB 16,550-16,850/mt.

LME tin should test resistance at USD 20,900/mt today and support at USD 20,000/mt.

LME aluminum will fall to USD 2,060-2,090/mt today since LME aluminum stocks are beginning to rise.

SMM expects aluminum to hover at highs in the short term, and eyes should be on its support at the 5-day moving average.