Interest Rate Cut was Announced, Fundamentals Remain Strong, Short-term Aluminum Prices Expected to Fluctuate Upward [SMM Aluminum Morning Comment]

SMM, Sep 19: Overnight, the most-traded SHFE aluminum 2410 contract opened at 19,960 yuan/mt, reached a high of 19,975 yuan/mt, a low of 19,855 yuan/mt, and closed at 19,930 yuan/mt, up 40 yuan/mt, an increase of 0.2%. The previous trading day, LME aluminum opened at $2,509/mt, reached a high of $2,542/mt, a low of $2,485/mt, and closed at $2,522/mt, up $15.5/mt, an increase of 0.62%.
Summary: On the macro front, the US Fed initiated a rate cut cycle with a 50 basis point reduction. The dot plot indicates that the Fed will cut rates by another 50 basis points this year and 100 basis points next year. Governor Bowman voted for a 25 basis point cut. Powell stated that the pace of rate cuts could be fast, slow, or paused depending on circumstances, with employment and inflation risks balanced. He did not see signs of an increasing likelihood of recession in the economy and did not declare victory over inflation. On the fundamentals side, domestic aluminum is expected to remain stable in the short term, while overseas production cuts are occurring, and future supply is gradually peaking. On the demand side, the market is gradually entering the peak consumption season, with aluminum demand performing well and aluminum social inventory decreasing effectively. The fundamentals of supply and demand are turning towards strong support, and aluminum prices are expected to fluctuate upward mainly under the backdrop of strong fundamentals and macro uncertainties.