SMM Aluminum Market Morning Comment (June 24)

Last Friday night, the most-traded SHFE 2408 aluminum contract opened at 20,430 yuan/mt, reaching a high of 20,470 yuan/mt and a low of 20,385 yuan/mt, and closed at 20,435 yuan/mt, down 120 yuan/mt, a decrease of 0.58%. The previous trading day, LME aluminum opened at $2,522.5/mt, hit a high of $2,537.5/mt and a low of $2,501/mt, and closed at $2,513/mt, down $8/mt, a decrease of 0.32%.

Summary: On the macro front, the US Fed's June comprehensive S&P Global PMI index was better than expected, and the US dollar index continued to rise, putting pressure on non-ferrous metals. Domestically, rural homestead policies were introduced, further stimulating urban housing demand. On the fundamentals, domestic aluminum capacity remained at a high level. Boosted by a rebound in aluminium billet conversion margins, aluminum liquid alloying ratio increased, and ingots production decreased. Meanwhile, due to recent pullback in aluminum prices, downstream restocking sentiment improved, driving destocking in the social inventory of aluminum ingots. However, new orders in industries such as photovoltaics and automobiles were not ideal, and the operating rate of aluminum processing enterprises will remain sluggish. Amid weak macro front, together with a weakening trend in downstream consumption expectations, market sentiment remains cautious. SMM expects aluminum prices to show wide fluctuations.