SHFE Aluminum Pulled Back Under Pressure Today, Alumina Dropped Sharply [SMM Aluminum Futures Brief Review]

Published: Jan 6, 2025 15:09

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[SMM Aluminum Futures Brief Review: SHFE Aluminum Pulled Back Under Pressure Today, Alumina Dropped Sharply] Macro front, the Chinese government continued efforts to boost consumption, while regional conflicts remained unresolved. Fundamentals side, although multiple aluminum smelters in Sichuan and Guangxi cut production in December, and the resumption progress of some capacity stalled, production still showed positive YoY growth. Demand side, amid the off-season, market demand continued to weaken, operating rates in the aluminum processing industry declined steadily, and some aluminum processing plants were approaching holiday shutdowns.

》Check SMM Aluminum Product Prices, Data, and Market Analysis

SMM, January 6:

The most-traded SHFE aluminum 2502 contract opened at 19,780 yuan/mt, with an intraday high of 19,815 yuan/mt and a low of 19,530 yuan/mt, closing at 19,565 yuan/mt, down 1.39%. Trading volume reached 160,000 lots, and open interest stood at 147,000 lots.

SMM Comments: On the macro front, the Chinese government continues to boost consumption, while regional conflicts remain unresolved. Fundamentals side, although several aluminum smelters in Sichuan and Guangxi reduced production in December, and some capacity resumption progress stalled, production still showed positive YoY growth. Demand side, market demand continued to weaken during the off-season, with operating rates in the aluminum processing industry declining steadily, and some aluminum processing plants nearing holiday shutdowns. Overall, fundamentals side, supply-side pressure slightly eased, but weak demand during the off-season and the risk of inventory buildup in social stocks persisted. In the short term, aluminum prices are expected to fluctuate downward. In the long term, attention should be paid to the US Fed's future stance on interest rate cuts and changes in the pace of consumption recovery.

The most-traded alumina 2502 contract opened at 4,397 yuan/mt, reached a high of 4,397 yuan/mt and a low of 4,250 yuan/mt, and closed at 4,254 yuan/mt, down 5.68%. Trading volume reached 271,000 lots, and open interest stood at 110,000 lots.

SMM Comments: Recently, weekly operating rates of alumina showed a slight rebound, with a slight increase in alumina supply. As technological transformations and production cuts occurred in aluminum smelters in Guangxi and Sichuan, alumina demand slightly declined, and the previously tight alumina supply situation improved. By the end of December, alumina raw material inventories at aluminum smelters slightly rebounded, while downstream restocking and purchasing enthusiasm weakened. Acceptance of high-priced spot alumina decreased, and with reports of some low-price transactions, suppliers showed an increased willingness to sell. In the short term, spot alumina prices are expected to maintain a slight downward trend.

【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 not related to SMM.】

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

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