SMM Morning Comment For Aluminium Market On August 3

SHANGHAI, Aug 3 (SMM) –

Overnight, the most-traded SHFE 2309 aluminium contract opened at 18,435 yuan/mt, with the lowest and highest prices at 18,385 yuan/mt and 18,495 yuan/mt before closing at 18,415 yuan/mt, down 125 yuan/mt or 0.67% from Wednesday. LME aluminium opened at $2,252.5/mt on Wednesday, with its high and low at $2,257/mt and $2,203/mt respectively before closing at $2,210/mt, a decrease of $43/mt or 1.91%.

On the macro level, the US dollar index rose strongly again overnight. Data showed that the number of US private jobs increased more than the expected in July, which supported the US dollar and put downward pressure on non-ferrous metals price. 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. On the demand side, favorable policies have promoted real estate, automobile, and other related consumption to gradually pick up, but the impact of follow-up policies still needs further observation. In addition, some end-users have asked employees to take a break recently against slack demand in summer, so the downstream demand may be weakened. In the short term, SHFE aluminium will remain volatile, and consumption and inventory still need attention.