SMM Aluminum Market Morning Comment (Apr 11)

Overnight, the most-traded SHFE 2406 aluminum contract opened at 20,500 yuan/mt, with the highest and lowest prices at 20,520 yuan/mt and 20,220 yuan/mt before closing at 20,420 yuan/mt, down 85 yuan/mt or 0.41%. LME aluminum opened at $2,459.5/mt in the previous trading day, with its high and low at $2,494/mt and $2,437/mt respectively before closing at $2,471/mt, an increase of $12.5/mt or 0.51%.

Summary: On the macro level, the US CPI data for March rose more than expected, and market expectations for the Fed's June rate cut cooled again. The domestic aluminum operating capacity was recovering slowly. Downstream operating rate continued to rise, but high prices may suppress downstream procurement enthusiasm, and spot discounts sustained. Overall, the aluminum prices stayed at highs due to growing expectations of US economic recovery and positive fundamentals, and may swing on a strong note. We need to pay attention to impact of high prices on downstream procurement and aluminium ingot destocking.