SMM Aluminum Market Morning Comment (Aug 5)

Market: On Friday night, the most-traded SHFE aluminum 2409 contract opened at 19,135 yuan/mt, reaching a high of 19,195 yuan/mt and a low of 18,905 yuan/mt, and closed at 18,995 yuan/mt, down 225 yuan/mt, a decrease of 1.17%. The previous trading day, LME aluminum opened at $2,279/mt, with a high of $2,304/mt and a low of $2,257/mt, and closed at $2,263/mt, down $10.5/mt, a decrease of 0.46%.

Summary: On the macro level, the Chinese government continues to boost the domestic economy, the US Fed's rate cut expectations are increasing, global liquidity is becoming more abundant, together with the escalation of regional conflicts, providing some upward momentum for aluminum prices. However, on the fundamentals side, aluminum still shows a pattern of supply growth and weak demand. The production of aluminum in July is expected to increase to around 3.68 million mt, and social inventory remains at a high level for the same period, putting pressure on aluminum prices. In the short term, both macro and fundamental factors are mixed, and aluminum prices are expected to fluctuate widely.