SMM Morning Comment For Aluminium Market July 26

SHANGHAI, Jul 26  (SMM) –  The most-traded SHFE 2309 aluminium contract opened at 18395 yuan/mt overnight, with the highest and lowest prices at 18435 yuan/mt and 18370 yuan/mt before closing at 18390 yuan/mt, down 10 yuan/mt or 0.05%. LME aluminium opened at $2205.5/mt on Tuesday, with its high and low at $2246.5/mt and $2204/mt respectively before closing at $2236.5/mt, an increase of $29/mt or 1.31%.

On the macro level, the Fed is about to raise interest rates, but there is an expectation to stop raising interest rates in the future. Domestic stimulus policies are frequent, and the macro front is relatively stable. In terms of fundamentals, the resumption of aluminium production in Yunnan is speeding up, and it is expected that some large smelters in the region will be able to produce at full capacity by the end of August. At present, the production in Yunnan is gradually climbing, and the supply pressure in the South China market will gradually be reflected. In terms of consumption, domestic downstream demand is in the off-season. So far, the domestic aluminium ingot inventory accumulation is lower than expected. The low inventory in the off-season may give support to aluminium prices. SHFE aluminium may move rangebound in the short term.

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