Market Sentiment Improves, SHFE Aluminum Rises Overnight [SMM Aluminum Morning Briefing Nov 20]

Overnight, the most-traded SHFE aluminum 2501 contract opened at 20,540 yuan/mt, reached a high of 20,670 yuan/mt, a low of 20,520 yuan/mt, and closed at 20,650 yuan/mt, up 65 yuan/mt or 0.32% from the previous close. On Tuesday, LME aluminum opened at $2,609.5/mt, hit a high of $2,655/mt, a low of $2,606/mt, and closed at $2,645.5/mt, up $35/mt or 1.34%.

Summary: On the macro front, the market currently sees a 59.1% probability of the US Fed cutting interest rates by 25 basis points at its December meeting, down from 76.8% a month ago. Domestically, the National Development and Reform Commission stated at a press conference on the 19th that it will propose new policies to further increase support and expand the scope of support, with greater efforts to encourage private enterprises to participate in national major project construction. On the fundamentals side, domestic aluminum production remains stable, alumina prices continue to rise, and cost side pressure persists. On the demand side, shipments from Xinjiang show signs of improvement, and concentrated arrivals are expected in Gongyi and Wuxi regions in the short term, with an inventory inflection point possibly appearing as early as next week. Additionally, attention should be paid to the "rush to export" by downstream sectors before the official implementation of the aluminum semis export tax rebate cancellation and whether the aluminum price correction will continue to drive spot cargo outflows from warehouses. Overall, domestic aluminum remains in a state of low inventory and high costs. The market is gradually digesting the impact of the aluminum semis export tax rebate cancellation, with market sentiment slightly easing. In the short term, aluminum prices are expected to remain in a state of fluctuation and consolidation.