SMM Aluminum Market Morning Comment (Jun 25)

Overnight, the most-traded SHFE aluminum contract 2408 opened at 20,395 yuan/mt, reaching a high of 20,470 yuan/mt and a low of 20,330 yuan/mt, and closed at 20,350 yuan/mt, down 45 yuan/mt, a decrease of 0.22%. The previous trading day, LME aluminum opened at $2,510.5/mt, hit a high of $2,531/mt and a low of $2,495.5/mt, and closed at $2,497.5/mt, down $16/mt, a decrease of 0.64%.

Summary: On the macro front, the US Fed's June comprehensive S&P Global PMI index was better than expected. Domestically, multiple rural homestead policies were introduced, and the National Development and Reform Commission, along with other departments, issued new consumption measures to further expand domestic demand. On the fundamentals, domestic aluminum capacity remained at a high level. Boosted by the rebound in aluminium billet conversion margins, the aluminum liquid alloying ratio increased, and the ingot production in the industry decreased. According to the SMM survey, new orders in industries such as photovoltaics and automobiles were not ideal, and the operating rate of aluminum processing enterprises is expected to remain sluggish in the short term. Given the weak macro front, together with the weakening trend in downstream consumption expectations, market sentiment remains cautious. SMM expects aluminum prices to show a wide range of fluctuations in the short term.