Alumina Prices Struggle to Halt Decline, SHFE Aluminum Rebounds from Bottom [SMM Aluminum Futures Brief]

Published: Jan 15, 2025 15:05

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[SMM Aluminum Futures Brief Review: Alumina Prices Struggle to Halt Decline, SHFE Aluminum Rebounds from Bottom] 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 may continue their downward trend in the short term.

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

SMM, January 15:

Today, the most-traded SHFE aluminum 2503 contract opened at 20,285 yuan/mt, with a high of 20,300 yuan/mt, a low of 20,025 yuan/mt, and closed at 20,285 yuan/mt, down 0.49%. Trading volume was 163,000 lots, and open interest was 180,000 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 industry declining steadily. Some aluminum processing plants are nearing holiday shutdowns. Although pre-holiday restocking 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 continuation of pre-holiday restocking.

Today, the most-traded alumina 2502 contract opened at 3,909 yuan/mt, reached a high of 3,923 yuan/mt, a low of 3,780 yuan/mt, and closed at 3,809 yuan/mt, down 5.39%. Trading volume was 236,000 lots, and open interest was 89,000 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 spot alumina availability and a wider discount to online prices. 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 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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