SMM Aluminum Market Morning Comment (July 29)

Last Friday, the most-traded SHFE 2409 aluminum contract opened at 19,290 yuan/mt, reaching a high of 19,395 yuan/mt and a low of 19,280 yuan/mt, and closed at 19,370 yuan/mt, up 120 yuan/mt, or 0.62%. The previous trading day, LME aluminum opened at $2,275/mt, hit a high of $2,298/mt and a low of $2,270/mt, and closed at $2,281/mt, up $3.5/mt, or 0.15%.

Summary: On the macro side, global market liquidity is becoming increasingly abundant, and regional conflicts are intensifying again. On the fundamentals side, domestic aluminum supply continues to grow, with a significant YoY increase in net imports of primary aluminum. Downstream aluminum processing and end-user demand have entered the off-season, with the operating rate in the aluminum processing industry hitting a low point, and the effects of some stimulus measures have yet to be seen. Social inventory is at a three-year high for the same period, and spot discounts persist. On the cost side, there is also a risk of collapse. In the short term, aluminum fundamentals continue to exert downward pressure on aluminum prices, while macro fluctuations are relatively large. In the short term, attention should be paid to the impact of macro changes on aluminum prices.