SMM Morning Comment On Aluminiuml Market (Aug 14)

SHANGHAI, Aug 14 (SMM) –

Last Friday night, the most-traded SHFE 2309 aluminium contract opened at 18,400 yuan/mt, with the lowest and highest prices at 18,255 yuan/mt and 18,405 yuan/mt before closing at 18,345 yuan/mt, down 150 yuan/mt or 0.81% from the previous trading day. LME aluminium opened at $2,197/mt last Friday with its high and low at $2,206/mt and $2,166/mt respectively before closing at $2,178.5/mt, a decrease of $25.5/mt or 1.16% from the previous trading day.

On the macro side, the positive signs emerge this week. The Federal Reserve is expected to raise interest rates, while China is focusing on expanding domestic consumption, and economic stimulus policies continue to be implemented. In terms of fundamentals, domestic aluminum ingots social inventory declined to nearly 500,000 mt, but with the resumption of production in Yunnan, the aluminum ingots inventory pressure is expected to increase. Entering the middle of August, the downstream operating rate, especially the aluminum extrusion, plate and strip plants, has improved, but whether the consumer side can support the further decline in aluminum stocks is unpredictable. In the short term, low inventories will still support aluminum prices, while positive macro sentiment and signs of recovery in consumption will provide confidence to the market. But expectations of increased supply still put upward pressure on aluminum prices. SMM predicted that the short-term aluminum prices will remain volatile, and follow-up attention should be paid to consumption and inventory.