Macro Multi-Dimensional Bullish Factors Resonated, SHFE Aluminum and LME Aluminum Slightly Rose Overnight [SMM Aluminum Morning Brief]

SMM September 10:

Futures side, the most-traded SHFE aluminum 2510 contract opened at 20,750 yuan/mt in the previous trading day's night session, with a high of 20,825 yuan/mt, a low of 20,750 yuan/mt, and closed at 20,785 yuan/mt, up 0.17% from the previous close. LME aluminum opened at $2,610/mt, with a high of $2,630/mt, a low of $2,610/mt, and closed at $2,627.5/mt, up 0.69% from the previous close.

Currently, the macro front of the aluminum market shows a multi-dimensional bullish resonance pattern, providing strong support for aluminum prices. Internationally, data released by the US Commerce Department on Friday showed that the Personal Consumption Expenditures (PCE) price index rose 0.2% MoM in July, slowing from the unrevised 0.3% increase in June. The market currently expects an 87% probability of the US Fed cutting interest rates, up from 63% a month ago. Domestically, assuming an average annual power growth rate of 2.8% during the "16th Five-Year Plan" period, new energy installations reaching 3.1 billion kW, and new-type energy storage installations reaching 270 million kW by 2030, coal power generation is expected to peak this year, with the peak likely controlled within 5.55 trillion kWh. China's power sector is expected to achieve "carbon peak" in 2025, with a peak of 5.2 billion mt. Fundamentals side, according to SMM statistics, social inventory of aluminum ingots in three regions totaled 475,000 mt on September 9, flat from the previous trading day. For domestic aluminum billet inventory in two regions, Guangdong aluminum billet inventory was 60,000 mt, Wuxi aluminum billet inventory was 27,500 mt, totaling 87,500 mt, down 1,500 mt from the previous period. Overall, the macro environment remains bullish; fundamentals side, downstream demand is marginally improving, the proportion of liquid aluminum is increasing, casting ingot volume is decreasing, but the turning point for aluminum ingot inventory has not yet arrived, actual demand has not shown significant improvement, and downstream enterprises have limited room for cost increases. Aluminum prices are expected to remain under pressure above 20,900-21,000 yuan/mt, but with interest rate cut expectations and peak season expectations still present, aluminum prices are expected to find some support below. Subsequent aluminum prices still need to wait for the realization of the peak consumption season.

[The information provided is for reference only. This article does not constitute direct investment research advice. Clients should make decisions cautiously and not use this to replace independent judgment. Any decisions made by clients are unrelated to SMM.]