Driven by the Conduction Pressure of Low-Priced Deals in the Alumina Market, SHFE Aluminum Prices Fell Under Pressure [SMM Aluminum Futures Brief]

Check SMM Aluminum Product Prices, Data, and Market Analysis

SMM, March 21:

The most-traded SHFE aluminum 2505 contract opened at 20,750 yuan/mt, reached a high of 20,950 yuan/mt, a low of 20,750 yuan/mt, and closed at 20,895 yuan/mt, up 0.80%. Trading volume was 170,000 lots, and open interest was 247,000 lots.

SMM Comment: The US Fed maintained interest rates and signaled a potential rate cut, boosting market sentiment with Powell's reassuring remarks. Aluminum prices rebounded, but caution is still needed regarding possible changes in Trump's tariff policies, as the risk of economic downturn cannot be ignored. During the day, MIIT issued a notice emphasizing the need to adhere to goal-oriented approaches and implement the program of large-scale equipment upgrades and consumer goods trade-ins, and the implementation of major national strategies and the development of security capabilities in key areas. Focusing on key growth points with high relevance, strong driving force, and good benefits, strengthening the synergy between industrial and trade policies, stabilizing the export of industrial products, and properly handling the relationship between government and market, curbing cut-throat competition, and further optimizing the business environment, continuously consolidating the foundation for the sustained recovery and improvement of the industrial economy, providing long-term support for aluminum consumption. On the fundamentals side, there are significant bullish signals in the aluminum industry chain: According to SMM statistics, on March 20, the inventory of electrolytic aluminum ingots in major domestic consumption areas was 839,000 mt, down 28,000 mt WoW. LME aluminum inventory decreased by 1,600 mt, a decline of 0.33%. It is expected that aluminum prices will be more likely to rise than fall in the near term, fluctuating downward. Close attention should be paid to changes in US tariff policies and the actual release of downstream demand.

The most-traded SHFE alumina 2505 contract opened at 2,979 yuan/mt, reached a high of 3,035 yuan/mt, a low of 2,960 yuan/mt, and closed at 2,991 yuan/mt, up 0.44%. Trading volume was 141,000 lots, and open interest was 215,000 lots.

SMM Comment: The tug-of-war between sellers and buyers in the alumina spot market continues, with sporadic spot transactions and a slight decrease in transaction prices. The domestic alumina export window has closed, and the total registered warrants in the alumina futures delivery warehouse have exceeded 280,000 mt. Subsequent alumina exports and transfers to delivery warehouses may not provide sustained demand. Fundamentals side, in the short term, alumina operating capacity is expected to see both increases and decreases, with no significant reduction in total operating capacity anticipated. The alumina market remains in a small surplus, and spot alumina prices are expected to fluctuate downward.

[The information provided is for reference only. This article does not constitute direct advice for investment research decisions. Clients should make prudent decisions and not rely solely on this information. Any decision made by clients is unrelated to SMM.]