The off-season in the downstream sector, coupled with fear of high prices, led to sluggish transactions in the aluminum ingot market, with a 0.17% decline [SMM Aluminum Futures Brief Comment]

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SMM, July 3:

The most-traded SHFE aluminum 2508 contract opened at 20,715 yuan/mt today, with a high of 20,735 yuan/mt, a low of 20,660 yuan/mt, and closed at 20,680 yuan/mt, down 0.17%. Trading volume reached 58,900 lots, and open interest stood at 281,000 lots.

SMM Commentary: On the macro front, domestic favorable policies continue to strengthen with unchanged focus on boosting consumption, while overseas macro conditions present mixed risks. Fundamentally, some aluminum smelters increased casting ingot production, coupled with off-season demand from downstream sectors and fear of high prices, resulting in sluggish market transactions. Aluminum ingot inventory saw a slight buildup, reaching 474,000 mt in major domestic consumption areas on July 3, up 6,000 mt from Monday and 11,000 mt WoW from Thursday. Spot premiums/discounts weakened significantly, suggesting short-term aluminum prices will likely maintain range-bound fluctuations. Close monitoring of casting ingot production and inventory changes is warranted.

The most-traded alumina 2509 contract opened at 3,059 yuan/mt today, peaked at 3,064 yuan/mt, bottomed at 3,007 yuan/mt, and closed at 3,026 yuan/mt, down 1.05%. Trading volume reached 195,000 lots, and open interest stood at 279,000 lots.

SMM Commentary: This week, alumina operating capacity decreased by 340,000 mt/year to 88.63 million mt/year. In the near term, alumina operating capacity is expected to remain elevated with only sporadic routine maintenance at some facilities, maintaining relatively loose spot market supply and capping alumina spot prices. However, recent futures rallies have brought the risk-free arbitrage window between futures and spot alumina close to opening, spurring active inquiries from futures-linked traders. Spot cargo availability has temporarily tightened, prompting suppliers to raise quotes. Short-term alumina spot prices may see marginal gains, though future trends depend on supply-demand fundamentals, futures price movements, and delivery warehouse transfer demands.

[Information provided is for reference only. This article does not constitute direct investment research advice. Clients should exercise caution, avoid substituting independent judgment with this content, and understand that SMM bears no responsibility for any decisions made.]