SMM Morning Comment For Aluminium Market On August 2

SHANGHAI, Aug 2 (SMM) –

Overnight, the most-traded SHFE 2309 aluminium contract opened at 18,520 yuan/mt, with the lowest and highest prices at 18,510 yuan/mt and 18,510 yuan/mt before closing at 18,545 yuan/mt, down 40 yuan/mt or 0.22%. LME aluminium opened at $2,204.5/mt on Tuesday, with its high and low at $2,286/mt and $2,244/mt respectively before closing at $2,253/mt, a decrease of $34/mt, or 1.49%, from Monday.

On the macro level, the strengthening of the US dollar index overnight suppressed the upward movement of aluminum prices. 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, potentially fueling the total domestic operating capacity to a record high. At present, the amount of resumed production is mainly liquid aluminum, and there is no large aluminum ingot oversupply pressure. In the short term, the inflection point of inventory has not yet appeared, and there is no imminent oversupply. On the demand side, favorable policies have promoted real estate, automobile, and other related consumption to gradually pick up, driving the operating rate of extrusion and other aluminum downstream factories to rise, but some sectors are still in the off-season, and the impact of follow-up policies still needs further observation. In the short term, SHFE aluminium will remain volatile, and consumption and inventory still need attention.