Expectations of alumina supply contraction strengthen, alumina prices rise strongly [SMM Aluminum Futures Brief Comment]

》Check SMM aluminum product quotes, data, and market analysis

SMM, May 14:

Today, the most-traded SHFE aluminum 2506 contract opened at 20,155 yuan/mt, with a high of 20,290 yuan/mt, a low of 20,115 yuan/mt, and closed at 20,275 yuan/mt, up 0.60%. Trading volume was 102,000 lots, and open interest was 152,000 lots.

SMM Comment: On the macro front, domestic favorable policies remain unchanged, and positive developments in the Sino-US tariff negotiations may drive the futures market to stand firm on quotes. On the fundamental side, the de-stocking of domestic aluminum ingot inventory provides support for aluminum prices. As of May 14, the inventories in Guangdong, Wuxi, and Gongyi were 237,000 mt, 174,000 mt, and 60,400 mt, respectively, totaling 471,400 mt, a decrease of 8,000 mt from the previous day. LME inventory remained unchanged from the previous day at 399,300 mt. In the subsequent window period for Sino-US trade, rush to meet deadlines may continue to boost consumption and support the upward movement of aluminum prices. It is expected that domestic aluminum prices will fluctuate upward in the short term.

Today, the most-traded alumina 2509 contract opened at 2,890 yuan/mt, with a high of 2,946 yuan/mt, a low of 2,862 yuan/mt, and closed at 2,945 yuan/mt, up 2.04%. Trading volume was 475,000 lots, and open interest was 311,000 lots.

SMM Comment: Last week, alumina enterprises saw both increases and decreases in operating capacity, with the total operating capacity slightly decreasing by 80,000 mt/year. It is expected that some alumina enterprises will conduct maintenance in the subsequent period, while new alumina capacity is expected to continue to come online and increase output. In the short term, the operating capacity of alumina may fluctuate. Recently, downstream feedback indicates that spot cargo availability is tight in some regional markets. With suppliers standing firm on quotes, spot prices may rebound slightly. However, on the cost side, bauxite prices have fallen significantly compared to the previous period, weakening the cost support. Overall, the alumina market is influenced by a mix of bullish and bearish factors, and prices are expected to fluctuate in the short term.

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