SMM Aluminum Market Morning Comment (Apr 22)

Last Friday night, the most-traded SHFE 2406 aluminum contract opened at 20,380 yuan/mt, with its lowest and highest at 20,380 yuan/mt and 20,560 yuan/mt before closing at 20,475 yuan/mt, up 95 yuan/mt or 0.47%. LME aluminum opened at $2,610/mt in the previous trading day, with its high and low at $2,684/mt and $2,608.5/mt respectively before closing at $2,660.5/mt, up $50.5/mt or 1.93%.

On the macro front, expectations for the Fed to cut interest rates cooled. Risky assets and non-US monetary experienced an increase in volatility. In addition, the situation in Middle East intensified. The UK and the US imposed sanctions on Russian metals again, and Biden called for a 25% tariff on China’s aluminum semis, triggering turbulence in global metals market. The domestic aluminum supply rose further, but downstream demand still needs more stimulation from terminal consumption. The inventory of aluminum billets and aluminum ingots remained high. However, the domestic market may fluctuate at a high level amid global aluminum trade friction.