SMM Aluminum Market Morning Comment (Mar 21)

Overnight, the most-traded SHFE 2405 aluminum contract opened at 19,320 yuan/mt, with its lowest and highest at 19,295 yuan/mt and 19,365 yuan/mt before closing at 19,325 yuan/mt, up 40 yuan/mt or 0.21%. LME aluminum opened at $2,268/mt yesterday, with its high and low at $2,287/mt and $2264.5/mt respectively before closing at $2,283.5/mt, up $14.5/mt or 0.64%.

On the macro level, State Council released favourable policies to boost demand. Fed remained interest rates unchanged in March, which was in line with expectations. However, attitude towards cutting interest rates swung, which coupled with the US presidential election, bringing uncertainty to aluminum prices. Fundamentally, imports of primary aluminum are still at a high level, and the drought in Yunnan will not disturb aluminum production resumption in the short term. The arrivals of peak season boosted downstream operating rates. Aluminum ingot inventory is likely to peak, supporting aluminum prices.