SMM Aluminium Market Morning Comment (June 5)

SHANGHAI, Jun 5 (SMM) –The most-traded SHFE 2307 aluminium contract opened at 18,480 yuan/mt at last Friday’s night session, with its low and high at 18,370 yuan/mt and 18,520 yuan/mt before closing at 18,385 yuan/mt, down 95 yuan/mt, or 0.51%. LME aluminium opened at $2,275/mt last Friday, with its low and high at $2,256/mt and $2,314.5/mt respectively before closing at $2,267.5/mt, a drop of $2.5/mt or 0.11%.

The United States passed the debt ceiling bill, thus the market risk sentiment has improved, but overseas economic recession concerns still remain. The growth of domestic operating aluminium production capacity has slowed down. Smelters in Yunnan are unlikely to resume production on a large scale in the near term. Demand weakened, but social inventories of aluminium ingots continued to fall as smelters kept low share of ingot output. Low inventories will boost aluminium prices, but the upward room will be capped by poor demand.