SMM Daily Aluminium Review and Forecast

SHANGHAI, May 17 (SMM) - The most-traded SHFE 2306 aluminium contract opened at 18,115 yuan/mt overnight, with its low and high at 18,085 yuan/mt and 18,280 yuan/mt before closing at 18,230 yuan/mt, up 115 yuan/mt or 0.63%. LME aluminium opened at $2,265.5/mt on Tuesday, with its low and high at $2237.5/mt and $2,273/mt respectively before closing at $2,265/mt, a drop of $4/mt or 0.18%. 

US interest rate hike expectations still exist. There are growing fears of US economic recession. There are many macro uncertainties. Fundamentals: The domestic operating aluminium capacity continued to increase in May. In terms of cost, the price of SMM prebaked anodes plunged month-on-month in May, and the power cost of smelters with captive power plants also declined. Demand is lower than expected, and new orders at downstream enterprises are weak. Overseas demand for aluminium semis is not good. Consumption will hardly improve in May. Aluminium ingot inventories continue to fall, but inventory of billets and other intermediate aluminium products is still on the rise. It is expected that short-term aluminium prices will fall, but downside room will be limited due to low inventories.