The month-end inventory turning point is expected to appear [SMM Aluminum Morning Meeting Minutes Nov 26]

Overnight, the most-traded SHFE aluminum 2501 contract opened at 20,590 yuan/mt, reached a high of 20,705 yuan/mt, a low of 20,565 yuan/mt, and closed at 20,670 yuan/mt, up 135 yuan/mt from the previous day, an increase of 0.66%. Yesterday, LME aluminum opened at $2,632.5/mt, hit a high of $2,643/mt, a low of $2,610/mt, and closed at $2,630/mt, down $1.5/mt, a decrease of 0.06%.

Summary: Macro front, the market generally believed that Trump's rise to power would boost the US dollar, while expectations for the US Fed's interest rate cut next year weakened, pushing the US dollar index to a new high for the year on Friday, suppressing the performance of non-ferrous metals. The uncertainty of the Russia-Ukraine conflict intensified, and market risk aversion sentiment increased. Domestically, Li Qiang chaired a State Council executive meeting to discuss work related to promoting the healthy development of the platform economy. Fundamentals side, aluminum costs fluctuated at highs, raising market concerns about production cuts at high-cost enterprises. Downstream demand slightly rebounded in the short term, stimulated by a rush to export. Multiple sources reported that Xinjiang railway shipments have continued to improve, and short-term backlog pressure has been somewhat relieved. With the concentrated arrival of goods in transit, despite continued outflows from warehouses in the past week, inventory buildup is expected this week. The off-season inventory turning point is expected to arrive soon, and the tight state of the domestic spot market may ease, with low inventory support for aluminum prices gradually weakening. In the short term, the support logic of high costs and low inventory for domestic aluminum remains, but the support for aluminum prices has weakened. Coupled with the negative impact of the cancellation of export tax rebates for aluminum semis on medium and long-term aluminum demand, market sentiment is suppressed, and short-term aluminum prices are expected to mainly fluctuate and consolidate.