SHFE Aluminum Jumped Initially and Then Pulled Back Today, Alumina Fluctuated Upward [SMM Aluminum Futures Brief Review]

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SMM, December 30:

The most-traded SHFE aluminum 2502 contract opened at 19,770 yuan/mt, with an intraday high of 19,910 yuan/mt and a low of 19,695 yuan/mt, closing at 19,805 yuan/mt, down 0.13%. Trading volume was 148,000 lots, and open interest was 169,000 lots.

SMM Comments: On the macro front, the European Central Bank may slow its pace of interest rate cuts, coupled with the market's pessimism about the extent of US Fed interest rate cuts next year, keeping base metals under pressure. Fundamentals side, multiple aluminum smelters in Sichuan and Guangxi reduced production in December, with some capacity resumption progress stalled, though production still showed positive YoY growth. Demand side, market demand continued to weaken during the off-season, with operating rates in the aluminum processing sector declining steadily. Overall, the macro uncertainty surrounding the US Fed's interest rate cut pace and the delayed European Central Bank rate cuts, combined with slightly eased supply-side pressure but weak demand during the off-season and growing risks of inventory buildup, suggest short-term aluminum prices are expected to fluctuate downward.

The most-traded SHFE alumina 2502 contract opened at 4,750 yuan/mt, with a high of 4,860 yuan/mt and a low of 4,721 yuan/mt, closing at 4,838 yuan/mt, up 1.87%. Trading volume was 164,000 lots, and open interest was 151,900 lots.

SMM Comments: Supply side, domestic alumina operating rates remained high. Although some enterprises reduced roasting capacity due to winter environmental protection measures and maintenance, the significant profitability of alumina spurred high enthusiasm for production increases among alumina refineries, with some refineries slightly raising their operating capacity. Demand side, downstream aluminum smelters faced severe losses, with some aluminum plants in south China undergoing minor maintenance and production cuts. Additionally, some aluminum plants originally planned to complete technological transformation and resume production, but progress stalled due to high raw material prices, leading to a slight decrease in demand. Overall, the previously tight alumina supply situation has improved. However, buyers and sellers remain in a phase of negotiation, with suppliers maintaining a sentiment to stand firm on quotes. Downstream primarily executes long-term contracts and restocks on dips, showing low acceptance of high prices. In the short term, prices are expected to remain stable with a slight decline.

[The information provided is for reference only. This article does not constitute direct investment research advice. Clients should make cautious decisions and not substitute this for independent judgment. Any decisions made by clients are unrelated to SMM.]