Overnight, the most-traded SHFE aluminum 2501 contract opened at 20,550 yuan/mt, reached a high of 20,570 yuan/mt, a low of 20,460 yuan/mt, and closed at 20,475 yuan/mt, down 30 yuan/mt from the previous day, a decrease of 0.15%. On Thursday, LME aluminum opened at $2,638/mt, hit a high of $2,649/mt, a low of $2,626/mt, and closed at $2,638/mt, down $0.5/mt, a decrease of 0.02%.
Summary: On the macro front, political disputes in France and South Korea have intensified, and the situations in the Middle East and Russia-Ukraine remain uncertain, keeping market risk aversion sentiment alive. US Fed officials are open to an interest rate cut in December, while the European Central Bank and the Bank of England have both indicated continued interest rate cuts, leading to a slight rebound in non-ferrous metals. Domestically, positive signals have been released, with policy support emerging again, but potential risks from tariff and trade wars still need attention. On the fundamentals side, although aluminum production in November saw YoY growth, high aluminum costs have raised concerns about production cuts at high-cost enterprises, with domestic aluminum operating capacity showing mixed changes. In terms of inventory, despite a recent easing in the shipment pace of goods from Xinjiang, leading to fluctuating domestic aluminum ingot inventory, it is expected that the backlog situation in Xinjiang will continue to ease, necessitating caution against the pressure and risks from concentrated arrivals. Meanwhile, although the year-end inventory buildup inflection point has been delayed, the sustainability of off-season aluminum ingot outflows from warehouses is limited. Low inventory continues to provide short-term support for aluminum prices, but excessive optimism is unwarranted. Overall, the cancellation of export tax rebates for aluminum semis in December negatively impacts mid-term aluminum demand, but short-term market sentiment has somewhat eased, and the cost side continues to provide strong support. Aluminum prices are expected to mainly fluctuate in the near term.
