SHFE Aluminum Weakly Consolidates as Alumina Prices Slightly Collapse [SMM Aluminum Futures Brief]

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

SMM, February 12:

Today, the most-traded SHFE aluminum 2503 contract opened at 20,610 yuan/mt, with a high of 20,690 yuan/mt and a low of 20,520 yuan/mt, closing at 20,575 yuan/mt, down 0.48%. Trading volume was 96,000 lots, and open interest was 159,000 lots.

SMM Comments: On the macro front, the EU intensified sanctions, and the US imposed tariff pressures. In the short term, the global aluminum market will undergo structural adjustments due to policy impacts, requiring continuous attention to the dynamics of EU-US trade policies and changes in demand from major consumer markets. Yesterday, the Shanghai municipal government held a meeting with foreign financial institutions to promote high-level financial opening-up, providing some confidence to the financial market. Fundamentals side, the pressure of aluminum supply resumption has re-emerged, with domestic aluminum operating capacity expected to rise slowly in February. The average spot price of alumina continued to weaken, driving aluminum costs to extend their downward trend. As of now, aluminum costs have fallen below 17,300 yuan/mt, with industry profits exceeding 3,300 yuan/mt. Inventory-wise, it remains in a post-holiday inventory buildup phase, with inventories expected to continue increasing rapidly this week. Demand side, the operating rate of leading aluminum processing enterprises rose 5.7 percentage points WoW to 56.8%. Although it is currently the off-season, operating rates of aluminum plate/sheet, strip and foil, secondary alloy, and extrusion enterprises have all increased, especially with top-tier automotive extrusion enterprises accelerating their resumption of operations, providing support for demand. Meanwhile, due to financial constraints and fewer orders on hand before the holiday, extrusion enterprises stockpiled relatively less, which may lead to some stockpiling sentiment after the holiday. With the end of the Chinese New Year holiday, aluminum processing enterprises are gradually resuming production, and the consumer market is expected to recover progressively. In the near term, focus should be on the impact of tariff events, post-holiday aluminum ingot inventory changes, and the pace of downstream resumption. SHFE aluminum is expected to fluctuate at highs in the short term.

Today, the most-traded alumina 2505 contract opened at 3,445 yuan/mt, with a high of 3,458 yuan/mt and a low of 3,372 yuan/mt, closing at 3,387 yuan/mt, down 2.19%. Trading volume was 133,000 lots, and open interest was 163,000 lots.

SMM Comments: Overall, in the short term, alumina operating capacity continues to increase, and the alumina spot market supply is relatively ample compared to earlier periods. Domestic alumina prices are continuously declining, while overseas alumina spot transaction prices have stabilized. Model calculations show that imported alumina losses exceed 1,000 yuan, and the domestic alumina export window may gradually open. In the short term, there are no clear expectations for alumina production cuts, and supply remains stable. Some aluminum production cuts or technological transformation capacities in south-west China may gradually resume production, with demand slightly rebounding, but it is unlikely to reverse the relatively ample alumina spot market. Moving forward, attention should be paid to domestic alumina exports, bauxite prices, and supply conditions.

[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.]