US Dollar Index Rose Slightly in the Short Term, SHFE Aluminum Fluctuated Upward Today [SMM Aluminum Futures Brief Review]

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

SMM, February 12:

Today, the most-traded SHFE aluminum 2503 contract opened at 20,530 yuan/mt, with a high of 20,640 yuan/mt and a low of 20,490 yuan/mt, closing at 20,550 yuan/mt, down 0.17%. Trading volume was 93,000 lots, and open interest was 148,000 lots.

SMM Comments: On the macro front, after the release of January CPI data, which exceeded expectations across the board, the US dollar index rose sharply in the short term but ultimately closed up 0.05% at 107.98 due to the potential signing of a reciprocal tariff executive order by Trump. With the EU intensifying sanctions and US tariff pressure, the global aluminum market is expected to undergo structural adjustments in the short term due to policy impacts. Continuous attention should be paid to the dynamics of EU-US trade policies and changes in demand in major consumer markets. Fundamentals side, the pressure for aluminum supply-side restarts 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 further downward. Cost-side support has continued to weaken, with aluminum costs currently falling below 17,200 yuan/mt, and industry profits exceeding 3,300 yuan/mt. Inventory-wise, the market 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 for aluminum plate/sheet, strip and foil, secondary alloy, and extrusion enterprises have all increased, particularly for automotive extrusion top-tier enterprises, which have accelerated their resumption of operations, providing support for demand. Additionally, due to financial constraints and fewer orders on hand before the holiday, extrusion enterprises had relatively low stockpiling, 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, attention should focus 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 3,366 yuan/mt, with a high of 3,392 yuan/mt and a low of 3,339 yuan/mt, closing at 3,360 yuan/mt, down 1.41%. Trading volume was 143,000 lots, and open interest was 166,000 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 have continued to decline, 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. However, it is unlikely to reverse the relatively ample supply in the alumina spot market. Continuous 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.]