SMM Morning Comment For Aluminium Market On August 16

SHANGHAI, Aug 16 (SMM) –

Overnight, the most-traded SHFE 2309 aluminium contract opened at 18,405 yuan/mt, with the lowest and highest prices at 18, 390 yuan/mt and 18,535 yuan/mt before closing at 18,465 yuan/mt, up 100 yuan/mt or 0.54% from the previous trading day. LME aluminium opened at $2,147/mt on Tuesday with its high and low at $2,171.5/mt and $2,136.5/mt respectively before closing at $2,141.5/mt, a decrease of $4.5/mt or 0.21% from the previous trading day.

On the macro side, as fears of a renewed interest rate hike resurfaced in the middle of the week, the positive macro sentiment came to an abrupt end. Recently, traders need to pay close attention to the multiple impacts of the Federal Reserve’s interest rate hike expectations and exchange rate fluctuations on the non-ferrous metal market. In terms of fundamentals, domestic aluminum ingots social inventory declined to nearly 500,000 mt, but with the resumption of production in Yunnan, the aluminum ingots inventory pressure is expected to increase. Entering the middle of August, the downstream operating rate, especially the aluminum extrusion, plate and strip plants, has improved, but whether the consumer side can support the further decline in aluminum stocks is unpredictable. In the short term, low inventories will still support aluminum prices, while positive macro sentiment and signs of recovery in consumption will provide confidence to the market. But expectations of increased supply still put upward pressure on aluminum prices. SMM predicted that the short-term aluminum prices will remain volatile, and follow-up attention should be paid to consumption and inventory.