SMM Aluminium Market Morning Comment (Jan 11)

Overnight, the most-traded SHFE 2403 aluminium contract opened at 19,050 yuan/mt, with high and low at 19,050 yuan/mt and 18,975 yuan/mt before closing at 19,005 yuan/mt, up 5 yuan/mt or 0.03%. LME aluminium opened at $2,243.5/mt on Wednesday, with high and low at $2,258.5/mt and $2,230.5/mt respectively before closing at $2,235/mt, a drop of $7/mt or 0.31%.

From a macro perspective, the U.S. dollar dropped 0.16% overnight, and the market awaited inflation data due to be released this week for clues on when the Federal Reserve may cut interest rates. In terms of fundamentals, as the disturbance in the alumina supply faded, the domestic aluminium production entered a period of stable operation, with no significant fluctuations in the short term; as for demand, aluminium downstream operating rates continued to be weak, and the amount of aluminium ingot produced was expected to increase MoM. However, domestic aluminium ingot inventories continued to remain low, supporting aluminium prices. Short-term aluminium prices will remain volatile, and we need to pay close attention to the pace of the Federal Reserve's interest rate cuts, domestic consumption and inventory changes.