Macro sentiment shifted, leading to a decline in overnight aluminum futures; but fundamentals are expected to provide good support [SMM Aluminum Morning Comment Oct 10]

SMM, Oct 10: The most-traded SHFE aluminum 2411 contract opened at 20,390 yuan/mt, reaching a high of 20,480 yuan/mt and a low of 20,300 yuan/mt, closing at 20,460 yuan/mt, down 105 yuan/mt, a decrease of 0.7%. Yesterday, LME aluminum opened at $2,571.5/mt, with a high of $2,579/mt and a low of $2,505/mt, closing at $2,545/mt, down $25/mt, a decrease of 0.97%.

Summary: On the macro front, the US Fed's September meeting minutes revealed significant internal disagreements on interest rates, causing a substantial shift in the overall macro environment, which drove the US dollar index to rebound sharply, suppressing the metals market. Domestically, the "systematic implementation of a package of incremental policies" meeting content was slightly below market expectations. Fundamentally, expectations for production cuts in Yunnan in Q4 have decreased, combined with the release of some new and resumed capacity, maintaining a growth trend in the domestic aluminum market supply side. Cost side, the tight balance in spot alumina persists, making domestic aluminum costs more likely to rise than fall. Demand side, October remains a small peak season for downstream aluminum processing, with industry operations largely stable, and future attention is needed on order conditions. Overall, with no prominent supply-demand mismatch in the aluminum market fundamentals, short-term fluctuations may follow macro sentiment. Future attention should focus on domestic consumption and changes in international macro sentiment.