SMM Aluminum Market Morning Comment (Jan 12)

Overnight, the most-traded SHFE 2403 aluminum contract opened at 19,080 yuan/mt, with high and low at 19,085 yuan/mt and 18,935 yuan/mt before closing at 18,970 yuan/mt, down 85 yuan/mt or 0.45%. LME aluminum opened at $2,234/mt on Thursday, with high and low at $2,252/mt and $2,229.5/mt respectively before closing at $2,235/mt, unchanged from the previous trading day.
From a macro perspective, overnight data showed that the U.S. consumer price inflation rate in December was higher than expected, suppressing market interest rate cut expectations. The dollar rose, suppressing aluminum prices. In terms of fundamentals, as the disturbance in the alumina supply re-emerged, the domestic aluminum production entered a period of stable operation, but imported aluminum ingots may increase; as for demand, aluminum downstream operating rates continued to be weak, and the amount of aluminium ingot produced was expected to increase MoM. However, domestic aluminum ingot inventories continued to remain low and alumina market performed well, supporting aluminum prices. Short-term aluminum prices will remain volatile, and we need to pay close attention to the pace of the Federal Reserve's interest rate cuts, domestic consumption and inventory changes.