SHFE Aluminum Center Shifts Downward, Alumina Fluctuates Rangebound [SMM Aluminum Futures Brief]

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

SMM, January 20:

Today, the most-traded SHFE aluminum 2503 contract opened at 20,550 yuan/mt, with a high of 20,550 yuan/mt, a low of 20,345 yuan/mt, and closed at 20,405 yuan/mt, down 0.17%. Trading volume was 151,000 lots, and open interest was 200,000 lots.

SMM Comments: On the macro side, US December retail sales growth was weaker than expected, and dovish remarks from US Fed officials suppressed US Treasury yields and the US dollar, improving the macro sentiment. Domestically, GDP achieved the annual growth target of 5%. The annual industrial added value of enterprises above designated size increased by 5.8% year-on-year, with data outperforming expectations. However, aluminum supply remained stable, while spot alumina prices continued to decline due to ample supply, leading to weaker cost support for the aluminum industry. On the demand side, as the Chinese New Year approaches, market demand has softened, and some small and medium-sized aluminum processing plants are nearing holiday shutdowns, introducing uncertainties to the sustainability of inventory destocking. In the short term, attention should remain on the impact of spot alumina price pullbacks on aluminum costs, as well as downstream holiday schedules and the continuity of pre-holiday restocking.

Today, the most-traded alumina 2502 contract opened at 3,884 yuan/mt, reached a high of 3,951 yuan/mt, a low of 3,811 yuan/mt, and closed at 3,840 yuan/mt, up 2.48%. Trading volume was 333,000 lots, and open interest was 73,000 lots.

SMM Comments: Recently, weekly alumina operating rates have continued to increase slightly, with no significant changes on the demand side. Low-priced spot transactions have been frequent in the market, with a larger decline compared to earlier periods. In Henan, spot transaction prices on Thursday were 4,050 yuan/mt, down 830 yuan/mt from last Thursday's price of 4,880 yuan/mt. However, as of now, alumina capacity has not entered a large-scale loss-making phase. Alumina supply is expected to maintain high operating rates in the short term, with the supply-demand fundamentals remaining in a slight surplus. Overall, spot alumina prices are expected to continue their downward trend in the short term. Close attention should be paid to bauxite transaction prices, alumina costs, and overseas spot alumina prices in the near term.

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