SMM Aluminum Market Morning Comment (Mar 18)

At last Friday’s night session, the most-traded SHFE 2404 aluminum contract opened at 19,280 yuan/mt, with its lowest and highest at 19,225 yuan/mt and 19,300 yuan/mt before closing at 19,285 yuan/mt, down 10 yuan/mt or 0.05%. LME aluminum opened at $2,245/mt last Friday, with its high and low at $2281.5/mt and $2245/mt respectively before closing at $2,277/mt, up $21/mt or 0.93%.

On the macro level, State Council released favourable policies to boost demand. Attitude towards cutting interest rates swung in Europe and the US, which coupled with the US presidential election, bringing uncertainty to aluminum prices. The arrivals of peak season boosted downstream demand. Aluminum ingot social inventory rose at a slower pace and is likely to peak, supporting aluminum prices. We need to pay close attention to recovery in consumption during the peak season and the fluctuation of expectations for overseas interest rate cuts.