SMM September 28
Today, the most-traded SHFE aluminum 2611 contract showed a clear retreat after rapid rise and drifted lower. After opening at 24,260, it briefly rose to 24,265 before pulling back under pressure, hitting an intraday low of 23,935, and finally closing at 23,950, near the day's low, indicating bears held the initiative. Trading volume increased by 56,443 to 155,000 lots, while open interest decreased by 6,989 to 274,000 lots, showing a pattern of "price down, volume up, open interest down," suggesting strong willingness among bulls to exit, with some funds actively reducing positions and leaving the market, and market sentiment turning bearish. From a technical perspective, the closing price of 23,950 has broken below MA5 (24,110.93), MA10 (24,176.46), MA20 (24,208.13), MA40 (24,173.28), and MA60 (24,105.73) — all major moving averages. The short-term moving average system shows signs of bearish alignment, and the dense moving average support zone around 24,100-24,200 has been effectively breached, turning that area into resistance. Overall, the futures trend is weak. If it cannot quickly reclaim the 24,100 level, the short-term market may continue to drift lower, and attention should be paid to the effectiveness of support at the 23,900 level.
SMM Commentary:
Macro front: University of Michigan survey data shows that US consumers' assessments of their current and future personal financial situations both declined by about 10%, with concerns over high prices continuing to intensify. A gauge of US Treasury volatility is heading for its biggest gain in more than a year, after bond yields climbed to multi-decade highs, shaking the market out of its recent slump. The ICE BofA MOVE index, a measure of bond market volatility, has risen about 29.69% this week, the largest gain since last April's so-called "Liberation Day."
Fundamentals: Last week, the operating rate at leading downstream aluminum processing enterprises in China recorded 62.1%, up 0.2 percentage points MoM. With the Mid-Autumn Festival and National Day holidays approaching, pre-holiday stockpiling progressed in an orderly manner, and operating rates across sectors remained generally stable. Pre-holiday stockpiling supported overall stable industry operating rates, but peak-season demand fell short of expectations and cost and raw material pressures persisted. Short-term operating rates across sectors are expected to remain stable, with possible phased adjustments after the holiday. As of this Monday, China's social inventory of aluminum ingots decreased by 4,000 mt from last Thursday and by 47,000 mt from last Monday. In the short term, the destocking trend for aluminum is expected to continue.
Overall: On the macro front, the US Fed's hawkish rate hike cycle restarting, a strong US dollar, and high US Treasury yields continue to weigh on nonferrous metal valuations. On the fundamentals side, although domestic inventories remain low and destocking continues, rising casting ingot volumes combined with aluminum billet production cuts have weakened liquid aluminum demand. Coupled with position adjustment pressure ahead of the National Day holiday, the tug-of-war between longs and shorts has intensified, and aluminum prices are expected to consolidate with adjustments.
Today, the most-traded alumina 2701 contract showed a retreat after rapid rise and closed slightly lower in a weak pattern. After opening at 2,698, it briefly rose to 2,714, but then pulled back under pressure, hitting an intraday low of 2,690, and finally closing at 2,693, near the day's low, indicating heavy selling pressure above and insufficient bullish follow-through. Trading volume increased by 21,723 to 85,882 lots, while open interest decreased by 3,716 to 233,000 lots, showing a pattern of "price down, volume up, open interest down," suggesting some funds actively exited and market sentiment was cautious and bearish. From a technical perspective, the closing price of 2,693 has broken below MA5 (2,697.57), MA10 (2,704.35), MA20 (2,710.35), MA40 (2,719.95), and MA60 (2,729.15) — all major moving averages. The moving average system shows clear bearish alignment, and the dense moving average zone around 2,700-2,730 has formed resistance above. Overall, the futures trend is weak. If it cannot quickly reclaim the 2,700 level, the short-term market may continue to drift lower, and attention should be paid to the effectiveness of support at the 2,690 level. If broken, further downside may open up.
SMM Commentary:
Currently, total alumina inventory nationwide remains in an inventory buildup channel, but the pace of buildup has slowed compared to earlier periods. From the inventory structure perspective, raw material inventories at aluminum smelters have rebounded slightly, and downstream stocking pace has improved modestly. Finished product inventories at alumina refineries continue to accumulate, mainly driven by rising operating rates and increased production. Port inventories have basically stopped falling and stabilized, with the pace of bonded zone cargo re-exports and unloading slowing. In-transit and platform stockpiled inventories have edged up, with logistics segment inventories increasing. On the supply side, existing capacity and operating capacity of alumina nationwide have expanded simultaneously, weekly production continues to rise, and operating rates have edged up, with growth mainly coming from the release of new capacity in Guangxi, further intensifying the loose supply-demand balance. On the futures side, prices are consolidating on a weak note at low levels, futures and spot trends have diverged, market trading activity has declined, and both bulls and bears are turning cautious and wait-and-see, with no clear directional driver formed yet. Downstream aluminum smelters are mainly purchasing as needed, with raw material inventories seeing slight restocking and no concentrated stockpiling behavior observed. Looking ahead, operating capacity and weekly operating rates are expected to continue edging up. On the inventory side, domestic production remains high, and the slowing pace of port re-exports and unloading provides some offset, with total alumina inventory nationwide expected to continue a slight buildup trend. On the price side, the loose supply-demand balance remains unchanged and upward drivers are weak, with spot prices expected to remain stable and move sideways.
[The information provided is for reference only. This article does not constitute direct investment research advice. Clients should make decisions prudently and not use this as a substitute for independent judgment. Any decisions made by clients are unrelated to Shanghai Metals Market.]
