SMM Aluminum Market Morning Comment (Jan 9)

Overnight, the most-traded SHFE 2402 aluminum contract opened at 19,080 yuan/mt, with high and low at 19,135 yuan/mt and 19,020 yuan/mt before closing at 19,030 yuan/mt, down 155 yuan/mt or 0.81%. LME aluminum opened at $2,274.5/mt on Monday, with high and low at $2,276/mt and $2,234/mt respectively before closing at $2,237/mt, a drop of $35/mt or 1.54%.

From a macro perspective, the US services sector barely grew in December and indicators measuring employment fell to the lowest level in nearly three and a half years, leading to further decline in the US dollar. The US dollar index was down 0.15% overnight. Investors continued to digest last week's mixed US economic data and awaited new clues on when the Federal Reserve may start cutting interest rates from key inflation data. In terms of fundamentals, the domestic aluminum supply entered a period of stable operation in January, with no significant fluctuations in the short term; as for demand, aluminum downstream operating rates continued to be weak, and the amount of aluminium ingot produced was expected to increase MoM. Domestic aluminum ingot inventories continued to grow, suppressing SHFE aluminum. Short-term aluminum prices will remain volatile, and we need to pay close attention to the pace of the Federal Reserve's interest rate cuts, domestic consumption and inventory changes.