SMM Aluminum Market Morning Comment (Mar 12)

The most-traded SHFE 2404 aluminum contract opened at 19,195 yuan/mt overnight, with its low and high at 19,165 yuan/mt and 19,225 yuan/mt before closing at 19,220 yuan/mt, up 20 yuan/mt or 0.10%. LME aluminum opened at $2,236/mt yesterday, with its high and low at $2,260.5/mt and $2,231.5/mt respectively before closing at $2,252/mt, up by $16/mt or 0.72%.

On the macro level, State Council released favourable policies to boost the economy during the “Two Sessions”. Attitude towards cutting interest rates began to swing in Europe and the US, bringing uncertainty to aluminum prices. Fundamentally, China's aluminum production increased YoY in February, and the operating rate of aluminum plate/sheet, strip and foil declined YoY. The fundamentals are insufficient to provide upward momentum for aluminum prices. In the short term, we need to pay close attention to recovery in consumption during the peak season and the fluctuation of expectations for overseas interest rate cuts.