Aluminium Prices To Fluctuate Upwards In The Short Term, But Will Face Downside Risks In The Medium And Long Run As Fundamentals Weaken 

SHANGHAI, Jun 12 (SMM) – The most-traded SHFE 2307 aluminium contract opened at 18,425 yuan/mt at last Friday’s night session and rose to 18,535 yuan/mt before closing at 18,425 yuan/mt, up 15 yuan/mt or 0.08%.

LME aluminium opened at $2,261/mt last Friday, with its low and high at $2249/mt and $2,284.5/mt respectively before closing at $2,262/mt, a drop of $1.5/mt or 0.07%.

Sharply increasing US initial jobless claims led to growing expectations for the Fed to pause interest rate hike in June. China’s export data was lower than expected, and economic activities are at risk of cooling, but market is expecting stimulus policy. The domestic auto market recovered. The Ministry of Commerce and other government departments have taken measures to boost auto sales. The social inventory of aluminium ingots will continue to fall amid high proportion of molten aluminium output at smelters. Oversupply pressure will not be monitored until the third quarter.

Aluminium prices are expected to fluctuate upwards in the short term, but will face downside risks in the medium and long run due to growing supply and weakening consumption. The most-traded SHFE aluminium contract and LME aluminium are expected to move between 18,000-18,700 yuan/mt and $2,190-2,350/mt respectively this week.