Alumina Prices Plummet Rapidly, SHFE Aluminum Fluctuates Upward [SMM Aluminum Futures Brief]

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

SMM, January 14:

Today, the most-traded SHFE aluminum 2503 contract opened at 20,260 yuan/mt, with a high of 20,360 yuan/mt, a low of 20,200 yuan/mt, and closed at 20,300 yuan/mt, up 0.3%. Trading volume was 138,000 lots, and open interest was 183,000 lots.

SMM Comments: Currently, the macro side is mixed with both bullish and bearish factors. The Chinese government continues to boost consumption, regional conflict remains unresolved, and uncertainty persists regarding the pace of US Fed interest rate cuts. Fundamentals side, aluminum capacity remained stable in early January, while the alumina market maintained a slight surplus. Spot alumina prices are expected to continue their downward trend in the short term, and aluminum industry costs may keep declining. Demand side, market demand continues to weaken during the off-season, with operating rates in the aluminum processing sector declining steadily. Some aluminum processing plants are nearing holiday shutdowns. Although pre-holiday stockpiling has led to an unexpected inventory drawdown, temporarily supporting aluminum prices, the sustainability of this trend is expected to be limited. Key focus points include the impact of spot alumina price pullbacks on aluminum costs, as well as downstream holiday schedules and the continuity of pre-holiday stockpiling.

Today, the most-traded alumina 2502 contract opened at 4,055 yuan/mt, reached a high of 4,112 yuan/mt, a low of 3,917 yuan/mt, and closed at 3,925 yuan/mt, down 4.22%. Trading volume was 182,000 lots, and open interest was 90,000 lots.

SMM Comments: Recently, weekly alumina operating rates have continued to increase slightly, while demand remains relatively stable. With low-price transactions gradually emerging in the market, some suppliers have become more active in selling, leading to an increase in the availability of spot alumina and a wider discount to online prices for spot transactions. In the short term, some alumina capacity in Shanxi is expected to resume production, with supply anticipated to increase. On the demand side, aluminum operating rates remain relatively stable. The alumina market is expected to maintain a slight surplus, and spot alumina prices are likely to continue their downward trend in the short term.

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