SMM Morning Comment For Aluminium Market On November 7

SHANGHAI, November 7(SMM) –

The most-traded SHFE 2312 aluminum contract opened at 19305 yuan/mt overnight, with the highest and lowest prices at 19365 yuan/mt and 19305 yuan/mt before closing at 19335 yuan/mt, up 32 yuan/mt. LME aluminum opened at $2253/mt on Monday, with its low and high at $2243/mt and $2295/mt respectively before closing at $2286/mt, up $33/mt or 1.42%.

There is still great uncertainty in overseas macro front. U.S. economic data shows that the U.S. economy is resilient. The U.S. dollar index fluctuates at a high level, suppressing commodities. China has announced to issue an additional one trillion yuan of local government bonds, which could boost the economy and market. In terms of fundamentals, some aluminum billet factories have recently reduced production, the industry's ingot casting volume has increased month-on-month. The domestic aluminum supply will remain high in short-term. And imported ingots continue to enter China. The market supply in East China is loose. According to SMM statistics, as of November 6, the inventory of aluminum ingots in Wuxi was 223,000 mt, an increase of 13,000 mt from last Thursday. The inventory pressure is relatively large, mainly due to the shift to off-peak season of downstream consumption. Social inventories are still at 6-month high. Short-term aluminum prices may fluctuate rangebound.