Aluminium Prices Closed With Gains, Expectations For US Interest Hike Grow After Unexpected Rate Hike By The Bank Of Canada

SHANGHAI, Jun 8 (SMM) – The most-traded SHFE 2307 aluminium contract opened at 18,130 yuan/mt overnight, with its low and high at 18,080 yuan/mt and 18,190 yuan/mt before closing at 18,175 yuan/mt, up 70 yuan/mt or 0.39%. LME aluminium opened at $2,208/mt on Wednesday, with its high and low at $2,233/mt and $2,208/mt respectively before closing at $2,213/mt, up $7.5/mt or 0.34%.

On the macro front, the Bank of Canada unexpectedly raised interest rates by 25 basis points last night, raising market expectations for the US Fed’s rate hike in June. The market is waiting for next week’s U.S. May inflation data and the Fed’s interest rate decision. On fundamentals, Hydropower generation in Yunnan has gradually improved recently. SMM predicts that a small amount of aluminium capacity may be resumed in the province in late June. In addition, 200,000 mt of aluminium capacity will be resumed in Guizhou and Sichuan. On the demand side, downstream consumption has gradually entered the off-season. However, due to the high proportion of molten aluminium output at smelters, aluminium ingot social inventories continue to drop. Inventory decline may slow down as more cargoes arrive. Short-term aluminium prices are expected to remain rangebound.