SHANGHAI, May 19 (SMM) – The most-traded SHFE 2306 aluminium contract opened at 18,475 yuan/mt overnight, with its low and high at 18,300 yuan/mt and 18,485 yuan/mt before closing at 18,405 yuan/mt, down 70 yuan/mt or 0.38%. LME aluminium opened at $2,300.5/mt on Thursday, with its low and high at $2,264.5/mt and $2,309/mt respectively before closing at $2,282/mt, a drop of $18/mt or 0.78%.

The pace of cooling of US inflation is not enough for the Federal Reserve to suspend interest rate hikes, and the debt ceiling agreement has not yet been reached, thus there are many macro uncertainties. Fundamentals: The domestic operating aluminium capacity continued to increase in May. In terms of cost, the average 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. However, with the rapid decline in global aluminium ingot inventories, the risk of overseas short squeeze has increased. Rising spot premiums in east China should support SHFE aluminium prices.