SHFE Aluminium to Move Rangebound as Market Awaits Key US Inflation Indicator

SHANGHAI, Apr 25 (SMM) – Overnight, the most-traded SHFE 2306 aluminium contract went down to 18,700 yuan/mt after opening at 18,825 yuan/mt, but then rebounded before closing at 18,830 yuan/mt, down 70 yuan/mt or 0.37%. LME aluminium fell after opening at $2,399/mt on Monday, but rebounded towards the end of the day and closed at $2,385/mt, a drop of 0.73%.

On the macro level, the market generally expects the Fed to raise interest rates by 25 basis points at next week's meeting, or to suspend interest rate hikes in June. Market is awaiting the core personal consumption expenditures price index, which is the key inflation measure indicator, and the quarterly US GDP growth rate to be released later this week. On the fundamentals, April is still the peak season for downstream consumption, and the domestic aluminium ingot social inventory remains in a destocking state. At the same time, there are concerns that aluminium smelters in Yunnan may face additional production cuts. However, downstream buyers have not shown strong willingness to stock before the upcoming Labour Day holiday. And risk aversion may emerge before the holiday. As such, SHFE aluminium likely to move rangebound amid strong cautious sentiment.