SHFE Aluminum Climbs Steadily, Alumina Prices Jump Initially and Then Pull Back [SMM Aluminum Futures Brief Review]

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

SMM, February 6:

Today, the most-traded SHFE aluminum 2503 contract opened at 20,150 yuan/mt, with a high of 20,380 yuan/mt and a low of 20,085 yuan/mt, closing at 20,335 yuan/mt, up 0.35%. Trading volume was 125,000 lots, and open interest was 162,000 lots.

SMM Comments: Macro side, the US January ISM Non-Manufacturing PMI recorded 52.8, significantly below the expected 54.3. The US January ADP employment figure reached 183,000, the highest since October last year. US data released on Wednesday showed mixed results, with the US dollar index slightly declining. Fundamentals side, domestic aluminum operating capacity in February is expected to remain stable, while the average spot alumina price in February is expected to drop significantly, potentially driving aluminum costs to pull back again, weakening cost-side support further. Demand side, according to SMM statistics, the increase and growth rate of domestic aluminum ingot production during this year's Chinese New Year exceeded those of the same period last year and the recent years' average, exerting some pressure on short-term aluminum prices. Additionally, the market remains in the off-season, with downstream consumption yet to recover, leading to oversupply and a continued expansion of spot discounts. In the short term, aluminum prices are expected to fluctuate downward, with recent focus on the progress of tariff-related events, post-holiday inventory performance, and the pace of downstream resumption.

Today, the most-traded alumina 2505 contract opened at 3,460 yuan/mt, reaching a high of 3,580 yuan/mt and a low of 3,432 yuan/mt, closing at 3,496 yuan/mt, down 0.43%. Trading volume was 172,000 lots, and open interest was 121,000 lots.

SMM Comments: Recently, domestic weekly alumina operating rates have continued to fluctuate at highs, while overseas alumina transactions have increased, with prices declining and alumina supply remaining ample. During the Chinese New Year, domestic spot alumina transactions were relatively sluggish, with cost support evident. Spot transaction prices for alumina in north China saw a significant narrowing of declines, with current transaction prices approaching the theoretical marginal cost of alumina production in the region. Meanwhile, spot alumina prices in south China accelerated their decline, with the price difference between north and south China narrowing during the week. However, bauxite supplier quotes have recently declined, suggesting that alumina cost support may shift downward in the future. In the short term, no large-scale expectations for production cuts in alumina have been observed, and the spot alumina market is expected to remain relatively well-supplied. Alumina prices are expected to maintain a downward trend in the near 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 unrelated to SMM.]