SMM, July 1:
Today, SHFE aluminum 2608 contract opened at 22,565 yuan/mt, rose to a high of 22,755 yuan/mt, dipped to a low of 22,245 yuan/mt, and finally settled at 22,370 yuan/mt, down 215 yuan/mt or 0.95% from the previous trading day. Trading volume was 272,000 lots, and open interest stood at 287,000 lots, with a daily position decrease of 4,467 lots. The price has broken below all moving averages, widening the gap with MA5 (22,777) to over 400 points. MA10 (23,299.5), MA30 (24,013.67), and MA60 (24,421.75) are in a standard bearish alignment, accelerating the downtrend. In the MACD indicator, DIFF (-470.46) and DEA (-320.9) continue to diverge downward, with the histogram bar widening to -299.12, indicating persistently strengthening bearish momentum and no sign of the decline halting. Trading volume of 272,000 lots was below MA5 (317,300 lots), and the decline on shrinking volume suggests diminishing market participation. The daily position decrease of 4,467 lots indicates some bear profit-taking, but the trend has not yet reversed.
SMM Comment: The dispute over administrative rights in the Strait of Hormuz persists, and the resumption of navigation through the strait remains uncertain. The US Fed’s hawkish pivot boosted the US dollar index, putting pressure on nonferrous metal prices. Macro headwinds drove aluminum prices lower both in and outside China. Bearish factors dominate in the short term, and aluminum prices are expected to remain in the doldrums.
Today, alumina 2609 contract opened at 2,782 yuan/mt, rose to a high of 2,805 yuan/mt, dipped to a low of 2,771 yuan/mt, and finally settled at 2,786 yuan/mt, down 4 yuan/mt or 0.14% from the previous trading day. Trading volume was 158,800 lots, and open interest stood at 286,200 lots, with a daily position decrease of 569 lots. The price has broken below MA5 (2,803.6), MA30 (2,835.07), and MA60 (2,822.95), only temporarily holding below MA10 (2,846.4). MA5 has turned downward and is about to cross below MA60, a clear signal of a weakening moving average system. In the MACD indicator, DIFF (-6.18) has turned negative and is below DEA (6.65), with the histogram bar widening to -25.65, spreading downward after a death cross, indicating that short-term bearish momentum is dominant. Trading volume of 158,800 lots was below average volumes across all timeframes, and the decline on shrinking volume suggests a strong wait-and-see sentiment in the market.
SMM Comment: According to SMM statistics, as of last Thursday, China’s total alumina inventory edged down WoW. Inventory structure showed that aluminum smelters’ raw material inventory continued to destock slightly, but due to recent significant price fluctuations and divergent market outlooks, restocking willingness was weak, and end-users mostly stayed on the sidelines. In-factory inventory at alumina refineries decreased, mainly affected by phased maintenance at some northern enterprises, which prioritized consuming in-factory inventory amid production constraints. This impact is expected to gradually fade after maintenance concludes next week. Port inventory, meanwhile, continued to build up, with overseas port arrivals staying high and imported resources supplementing spot supply, adding market pressure. Overall, the oversupply pattern remains unchanged. Before Guinea’s bauxite quota policy is implemented, the market lacks clear bullish drivers. Next week, inventory is expected to shift from mild destocking to slight buildup, supply and demand will remain loose, and alumina prices will continue to consolidate in the doldrums.
[The information provided is for reference only. This article does not constitute direct investment research advice. Clients should make prudent decisions and not use this as a substitute for independent judgment. Any decisions made by clients are unrelated to Shanghai Metals Market.]
