Frequent disturbances in alumina news, aluminum prices fluctuate rangebound [SMM Aluminum Futures Brief Comment]

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

SMM News on June 4:

Today, the most-traded SHFE aluminum 2507 contract opened at 20,005 yuan/mt, with a high of 20,110 yuan/mt, a low of 19,975 yuan/mt, and closed at 20,075 yuan/mt, up 0.43%. Trading volume was 97,500 lots, and open interest was 190,000 lots.

SMM Commentary: Although the increase in US steel and aluminum tariffs to 50% is bearish, China's direct aluminum semis exports to the US have been restricted by high tariffs for years, so the actual incremental impact is limited. It mainly affects overall market sentiment, suppressing global aluminum trade liquidity, particularly impacting countries highly dependent on US exports, and exacerbating regional supply surplus pressure in the short term. On the fundamental side, domestic aluminum smelters' operating capacity remains stable. Notably, some aluminum smelters in north China have increased the proportion of liquid aluminum used in alloying, reducing casting ingot volumes and affecting the arrival of goods in major consumption areas. On the demand side, some downstream sectors are showing expectations of an off-season slowdown. Demand for PV aluminum is decreasing, and automotive aluminum demand is expected to weaken in mid-to-late June. Construction aluminum demand remains lukewarm, but currently benefits from orders from State Grid, keeping the operating rate of aluminum wire and cable high. Overall, short-term market sentiment may suppress aluminum prices due to tariff impacts. Meanwhile, domestic aluminum ingot inventory has declined more than expected, supporting aluminum prices and spot premiums. Although some sectors are showing expectations of a weakening off-season, the overall decline is better than expected, and demand resilience remains. It is expected that the most-traded SHFE aluminum contract will maintain a fluctuating trend in the short term, with solid support below. If macro pressures do not escalate significantly, prices may show mild strength.

Today, the most-traded alumina 2509 contract opened at 3,036 yuan/mt, with a high of 3,086 yuan/mt, a low of 3,010 yuan/mt, and closed at 3,063 yuan/mt, up 0.89%. Trading volume was 316,000 lots, and open interest was 300,000 lots.

SMM Commentary: According to SMM statistics, alumina's weekly operating capacity continued to rebound, reaching 86.67 million mt/year as of last Thursday, up MoM, further alleviating spot supply pressure and slowing the rise in spot prices. Recent overseas alumina transactions have been sluggish, with relatively small price fluctuations. As domestic prices continue to rise, alumina imports have shifted from losses to profits, and the domestic alumina import window is gradually opening. In the short term, with the gradual resumption of production from some alumina maintenance and production cuts, alumina supply pressure is expected to gradually ease. The average profit of the alumina industry has entered a profitable state, and the market has strong expectations for alumina production resumptions. Alumina futures prices have taken the lead in pulling back, which may drive spot prices weaker. Subsequent attention should be paid to changes in the capacity of domestic alumina enterprises and the supply of imported alumina.

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