SMM Aluminum Market Morning Comment (June 27)

The overnight SHFE 2408 most-traded aluminum contract opened at 20,320 yuan/mt, with a high of 20,380 yuan/mt, a low of 20,250 yuan/mt, and closed at 20,300 yuan/mt, up 70 yuan/mt, an increase of 0.35%. The previous trading day, LME Aluminum opened at $2,496/mt, with a high of $2,516/mt, a low of $2,482/mt, and closed at $2,511.5 /mt, up $14.97/mt, an increase of 0.6%.

Summary: On the macro level, the Federal Reserve is hawkish, the interest rate cut may be postponed until next year, and there may be a rate hike depending on inflation data; domestically, the trade-in policy continues to exert force, new real estate policies are being introduced in various places, aiming to further promote domestic consumption. On the fundamental, domestic aluminum production capacity maintains high, boosted by the rebound of aluminum billets processing fees, the proportion of aluminum alloying rebounded, and the industry's ingot production decreased. Affected by the pullback in aluminum prices, the daily inventory of aluminum ingots slightly decreased, but the social inventory of aluminum ingots is still at a high level for the same period in history, and the process of de-stocking still faces certain resistance. At the same time, according to SMM research, new orders in industries such as photovoltaics and automobiles are not ideal, and the operating rate of aluminum processing companies will maintain a low level in the short term. Under the weak macro background, coupled with the weakening trend of downstream consumption expectations, the market capital sentiment maintains a wait-and-see attitude, SMM expects that aluminum prices may show a wide range of fluctuations in the short term.