SMM Morning Comment For Aluminium Market On October 26

Overnight, the most-traded SHFE 2312 aluminum contract opened at 19055 yuan/mt, with its low and high at 18980 yuan/mt and 19065 yuan/mt before closing at 19010 yuan/mt, down 35 yuan/mt or 0.18%. LME aluminum opened at $2202/mt on Wednesday, with its low and high at $2199.5/mt and $2223/mt respectively before closing at $2212/mt, up 0.27%. There are many macro disturbing factors. The short-term Fed rate hike expectations swing and the Palestinian-Israeli conflict have intensified market uncertainty. Operating aluminum capacity in China is now 42.97 million mt, close to a peak, meaning no significant growth will be seen in short term. Downstream orders improved after the National Day holiday, but fell short of expectations. Aluminum ingot and billet pick-ups from social warehouses decreased last week. No inventory decline is expected any time soon. Aluminum prices are expected to move rangebound in the short term.