SMM Aluminum Morning Comment

The most-traded SHFE 2312 aluminum contract opened at 19215 yuan/mt in last night trading session, with the lowest and highest at 19130 yuan/mt and 19225 yuan/mt before closing at 19165 yuan/mt, down 50 yuan/mt, or 0.26%. Three-month LME aluminum opened at $2261.5/mt last evening and closed at $2246/mt, a decline of $17.5/mt or 0.77%.

There is still great uncertainty in overseas macroeconomics. U.S. economic data shows that the U.S. economy is resilient. The U.S. dollar index fluctuates at a high level, suppressing commodities. China will issue an additional one trillion yuan of local government bonds to boost the economic market. In terms of fundamentals, some aluminum billet factories have recently reduced production, and ingot casting volume has increased month-on-month. Yunnan's production reduction expectations are basically confirmed, the short-term domestic aluminum supply side mainly remain at high levels, and the imports did not decrease. Downstream consumption is weakening, and social inventory destocking of aluminum ingots is not smooth. The inventory is still at a high level since half a year. In the short term, aluminum prices may remain rangebound. We will pay attention to domestic aluminum inventories and downstream consumption in the future.