SMM Aluminum Market Morning Comment (Aug 7)

Market: Overnight, the most-traded SHFE aluminum 2409 contract opened at 18,910 yuan/mt, reaching a high of 19,030 yuan/mt and a low of 18,885 yuan/mt, and closed at 19,020 yuan/mt, up 225 yuan/mt, an increase of 1.20%. The previous trading day, LME aluminum opened at $2,263.5/mt, reached a high of $2,305/mt and a low of $2,238/mt, and closed at $2,301/mt, up $39/mt, an increase of 1.72%.

Summary: On the macro side, the Chinese government continues to boost the domestic economy, the US Fed's rate cut expectations are increasing, and regional conflict situations are escalating, providing upward momentum for aluminum prices. On the fundamentals side, aluminum supply is growing while demand remains bleak. Preliminary estimates for July's aluminum production are around 3.68 million mt, with social inventory 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.