Aluminium Supply Pressure to Appear in late July, SHFE Aluminium Prices to Remain Rangebound in the Near Term

The most-traded SHFE 2308 aluminum contract opened at 17,975 yuan/mt overnight, and closed at 17,995 yuan/mt, down 45 yuan/mt or 0.25%. LME aluminum opened at $2,227.5/mt on Wednesday, with its low and high at $2,201/mt and $2,249/mt respectively before closing at $2,247/mt, up $19/mt or 0.58%. 

Macroeconomic news were mixed. Overseas markets are paying close attention to the upcoming earnings season and US non-farm employment data on Friday. On the domestic front, the market expects that domestic policy stimulus will be strengthened. In terms of fundamentals, domestic operating aluminum production capacity increased slightly in June, and it will take some time for Yunnan's output to be released. Supply pressure may appear in late July.

At present, the domestic social inventory of aluminum is still at a low level. However, the aluminum social inventory may show a slight accumulation. Power rationing in Leshan, Sichuan has not included the aluminium industry. In the short term, aluminium supply will increase while demand will weaken. SHFE aluminium may fluctuate rangebound.