Inventory of aluminum ingots continues to decline. Today, SHFE aluminum jumped initially and then pulled back. [SMM Aluminum Futures Brief Comment]

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

SMM News on June 9:

Today, the most-traded SHFE aluminum 2507 contract opened at 19,980 yuan/mt, with a high of 20,095 yuan/mt, a low of 19,935 yuan/mt, and closed at 20,025 yuan/mt, down 0.22%. Trading volume was 133,000 lots, and open interest was 182,000 lots.

SMM Commentary: On the macro front, the phone call between China and the US may ease trade tensions, while the rebound in China's May manufacturing PMI and improvement in export indicators provide demand support, indicating that the domestic economy remains resilient. Fundamentals side, the operating capacity of domestic aluminum smelters remained stable. The reduction in casting ingot volumes has temporarily maintained the destocking trend of domestic aluminum ingot inventory. Cost side, the impact of the Guinea ore incident on alumina prices has eased, and the real-time cost of aluminum has slightly decreased MoM. On the demand side, there is dual pressure from domestic seasonal weakness and trade uncertainties. In the short term, the operating rate of aluminum processing enterprises will be under pressure, and the off-season atmosphere will intensify. Overall, the current low inventory and the expectation of a higher proportion of liquid aluminum provide strong support for aluminum prices. However, the off-season pressure on the demand side limits the upside room. Spot aluminum ingots in major consumption areas may soon face a situation of weak supply and demand, and aluminum prices are expected to remain rangebound and volatile in the short term.

Today, the most-traded alumina 2509 contract opened at 2,909 yuan/mt, with a high of 2,926 yuan/mt, a low of 2,859 yuan/mt, and closed at 2,892 yuan/mt, down 0.31%. Trading volume was 516,000 lots, and open interest was 301,000 lots.

SMM Commentary: Last week, the operating capacity of alumina increased by 600,000 mt/year to 87.27 million mt/year. It is understood that some imported alumina has arrived at Chinese ports. With supply recovering and no significant changes in demand, the total alumina inventory of aluminum smelters increased by 19,000 mt to 2.63 million mt last week. The import window remained open, and imported alumina supply is expected to increase in the future. In the short term, the alumina fundamentals may shift to a relatively loose pattern, and alumina spot prices are expected to remain in the doldrums. It is necessary to continue to monitor changes in the capacity of domestic alumina enterprises and the supply of imported alumina.

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