SMM Morning Comment For Aluminum Market On October 9

SHANGHAI, Oct 9(SMM) – On the final trading day before the National Day holiday, the most-traded SHFE 2311 aluminum contract opened at 19,420 yuan/mt, with its lowest and highest at 19,390 yuan/mt and 19,645 yuan/mt before closing at 19,445 yuan/mt, up 55 yuan/mt or 0.28% compared with the previous trading day. LME aluminum opened at $2,232/mt, with its high and low at $2,248/mt and $2,222.5/mt respectively before closing at $2,246/mt, an increase of $14/mt or 0.63%.

Overall, resulting from the continued strengthening of the US dollar index and expectations of overseas interest rate hikes, LME aluminum was on the way to rising during the holiday. The domestic manufacturing PMI data in September rebounded above 50%, further confirming the consumption improvement. Subsequent favorable policy and internal structural adjustment are expected to promote further economic recovery. In terms of fundamentals, the domestic supply is approaching its peak, and it is difficult to see a significant increment in the short term. Recently, due to the long holiday and the recent replenishment of overseas aluminum ingots, the domestic aluminum social inventory soared after the holiday, but the total inventory was still at a historically low level for the same period. Accumulated inventory may suppress SHFE aluminum prices and spot premiums, but in the medium and long term, with the growth rate of the supply narrowing largely, aluminum supply and demand will maintain a tight balance, providing support to the SHFE aluminum market.