SMM Morning Comment For Aluminium Market July 24

SHANGHAI, Jul 24 (SMM) – The most-traded SHFE 2308 aluminium contract opened at 18,305 yuan/mt at last Friday’s night session, with its low at 18,235 yuan/mt before closing at 18,280 yuan/mt, up 5 yuan/mt or 0.03%. LME aluminium opened at $2,255/mt last Friday, with its high and low at $2,262/mt and $2,201/mt respectively before closing at $2,205.5/mt, a drop of $51.5/mt or 2.28%.

On the macro level, the Fed is about to raise interest rates, but there is an expectation to stop raising interest rates in the future. Domestic stimulus policies are frequent, and the macro front is relatively stable. In terms of fundamentals, the resumption of aluminium production in Yunnan is speeding up, and it is expected that some large smelters in the region will be able to produce at full capacity by the end of August. At present, the production in Yunnan is gradually climbing, and the supply pressure in the South China market will gradually be reflected. In terms of consumption, domestic downstream operating rates are in the off-season. So far, the domestic aluminium ingot inventory accumulation is lower than expected. The low inventory in the off-season gives support to aluminium prices. SHFE aluminium may move rangebound in the short term.