Bullish Macro Sentiment and Low Inventory Support SHFE Aluminum in Short-Term Fluctuations [SMM Aluminum Weekly Review]

On the macro front, the US Fed initiated the third interest rate cut of the year and started bond purchases as expected in the early hours of Thursday Beijing time. Powell's remarks were more dovish than anticipated, leading to a decline in the US dollar and a rebound in base metals. Short-term macro sentiment improved.

In terms of supply, domestic operating aluminum capacity currently stands at 44.39 million mt. High profits have led to a slight increase in operating capacity, though the overall change remains relatively small.

Demand side, although December falls within the traditional consumption off-season, consumption in sectors such as automobiles, power, and electronics shows strong resilience without exhibiting weakness beyond seasonal patterns. The proportion of liquid aluminum also remains high. Delays in aluminum ingot shipments from Xinjiang, coupled with resilient consumption of aluminum semis, have prevented social inventory of aluminum ingots from entering a phase of sustained buildup. According to SMM statistics, as of December 11, mainstream social inventory of aluminum stood at 584,000 mt, a decrease of 11,000 mt from this Monday, remaining at a relatively low level and providing some support to aluminum prices.

Overall, the supply side remains stable with a slight increase in production. Fundamentals are marginally weakening, but this has not yet translated into inventory levels, and there is no significant supply-demand contradiction. The most-traded SHFE aluminum contract is expected to fluctuate between 21,700-22,300 yuan/mt next week; LME aluminum is expected to trade between $2,840-2,900/mt.

Model forecast: The price range for aluminum_the most-traded contract_closing price from this Friday to next Thursday (2025-12-18) is [21,740, 22,805], with a price center of 22,180, unit in yuan/mt. The extreme price range is [21,290, 23,180], the normal price range is [21,590, 22,930], and the conservative price range is [21,890, 22,680]. Next week's price trend is expected to fluctuate rangebound or be in the doldrums. The support range is [21,590, 21,890], and the resistance range is [22,680, 22,930].