Both SHFE And LME Aluminium Closed With Losses Overnight, Supply Pressure Is Emerging In Chinese Market

SHANGHAI, Jul 7 (SMM) – The most-traded SHFE 2308 aluminium contract opened at 17,865 yuan/mt overnight, with its low and high at 17,805 yuan/mt and 17,920 yuan/mt before closing at 17,830 yuan/mt. It fell by 25 yuan/mt or 0.14%. LME aluminium opened at $2,139/mt on Thursday, with its low and high at $2,127/mt and $2,153/mt respectively before closing at $2,130/mt, a drop of $7/mt or 0.33%. 

Uncertainty factors have increased in the macro aspect. Market is anticipating stimulus policies from China. The market is paying close attention to data such as the US non-farm payrolls data that will be released today. In terms of fundamentals, Yunnan's output has been gradually released. The latest data show that the downstream operating rate continued to decline, and the downstream consumption weakened. Aluminium ingot social inventory rose, but remained at a low level. In the short term, it is expected that SHFE aluminium may move rangebound. There are rumours of power rationing in Leshan, Sichuan. Market should also pay attention to the opportunities for the inflow of imported aluminium ingots brought about by the narrowing of the domestic and overseas price difference.

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