SMM Aluminum Market Morning Comment (Jan 29)

The most-traded SHFE 2403 aluminum contract opened at 19,115 yuan/mt last Friday night, with its low and high at 19,080 yuan/mt and 19,250 yuan/mt before closing at 19,215 yuan/mt, up 160 yuan/mt or 0.84%. LME aluminum opened at $2,234.0/mt last Friday, with its high and low at $2,283.0/mt and $2,233.5/mt respectively before closing at $2,258.0/mt, up by $26.0/mt or 1.16%.

On the macro front, US macro data demonstrated the resilience of the economy, and expectations for interest rate cuts once again cooled; In China, the macroeconomic environment was positive. Real estate support policies and relaxation of purchase restrictions in Guangzhou greatly boosted domestic market sentiment. In terms of fundamentals, as CNY is drawing near, aluminium downstream industries slashed or halted their production, weakening demand, but industry inventories remained at low levels driven by a high aluminum liquid ratio and downstream stockpiling before the CNY holiday. SMM predicts that the total domestic inventory accumulation during the 2024 CNY holidays may be lower than levels for the same period of previous years. In the short term, amid low inventory and no obvious contradiction between supply and demand, aluminum prices may fluctuate along with macro sentiment before CNY holidays.