SMM Aluminum Market Morning Comment (Mar 22)

Overnight, the most-traded SHFE 2405 aluminum contract opened at 19,510 yuan/mt, with high and low at 19,530 yuan/mt and 19,365 yuan/mt before closing at 19,405 yuan/mt, down 80 yuan/mt or 0.41%. LME aluminum opened at $2,290/mt in the previous trading day, with its high and low at $2,313.5/mt and $2,285.5/mt respectively before closing at $2,309/mt, up $25.5/mt or 1.12%.

On the macro level, State Council released favourable policies to boost demand. Fed maintained interest rates unchanged in March, which was in line with expectations. Swiss Central Bank cut interest rates, causing LME aluminum to rise sharply overnight. Fundamentally, imports of primary aluminum are still at a high level, and the drought in Yunnan will not disturb aluminum production resumption in the short term. The arrivals of peak season boosted downstream operating rates. Aluminum ingot inventory is likely to peak, supporting aluminum prices.