SMM Morning Comment For Aluminium Market On August 22

SHANGHAI, Aug 22 (SMM) –

Overnight, the most-traded SHFE 2309 aluminium contract opened at 18,460 yuan/mt, with the lowest and highest prices at 18,460 yuan/mt and 18,530 yuan/mt before closing at 18,515 yuan/mt, up 25 yuan/mt or 0.14% from the previous trading day. LME aluminium opened at $2,147/mt on Monday with its high and low at $2,150.5/mt and $2,115/mt respectively before closing at $2,145.5/mt, an inecrease of $7/mt or 0.33% from the previous trading day.

On the macro side, according to the minutes of the Federal Reserve meeting in July, most Fed members saw significant upside risks to inflation that might warrant further policy tightening. However, there are also many members who support maintaining the current interest rate, leading to large differences in the decision-making level. In terms of fundamentals, the amount of domestic ingots is still relatively small. It is difficult for the market to witness a large number of concentrated arrivals of ingots in the short term. Domestic aluminum ingots social inventory declined to nearly 500,000 mt but with the resumption of production in Yunnan, supplies may be gradually restored. In mid-August, the downstream inventory restocking was active, which strengthened confidence over the extended destocking of aluminum products and boosted spot premiums. In the short term, low inventories will still support aluminum prices. However, the uncertain macro sentiment and the expected supply increase will put pressure on the upward trend of aluminum prices. SMM predicted that the short-term aluminum prices will remain volatile, and follow-up attention should be paid to consumption and inventory.