Expectations for US Fed Interest Rate Cut Strengthen, Aluminum Costs Fluctuate at Highs [SMM Aluminum Morning Briefing Dec 9]

Last Friday night, the most-traded SHFE aluminum 2501 contract opened at 20,290 yuan/mt, reached a high of 20,370 yuan/mt, a low of 20,275 yuan/mt, and closed at 20,340 yuan/mt, up 30 yuan/mt from the previous day, an increase of 0.15%. Last Friday, LME aluminum opened at $2,633/mt, reached a high of $2,637.5/mt, a low of $2,584/mt, and closed at $2,607.5/mt, down $30.5/mt, a decrease of 1.16%.

Summary: On the macro front, expectations for a US Fed interest rate cut have strengthened, and positive signals have been released domestically, leading to a slight rebound in the non-ferrous metals market. On the fundamentals side, aluminum costs fluctuate at highs, raising concerns about production cuts at high-cost enterprises. Although the off-season has suppressed the operating rate of downstream enterprises, aluminum ingot social inventory remains low. In the short term, market sentiment is relatively calm, and aluminum prices are expected to maintain a trend of oscillation and consolidation. Close attention should still be paid to changes in aluminum costs and overseas tariff hike.