SMM Morning Comment For Aluminium Market On August 24

SHANGHAI, Aug 24 (SMM) –

Overnight, the most-traded SHFE 2309 aluminium contract opened at 18,730 yuan/mt, with the lowest and highest prices at 18,650 yuan/mt and 18,735 yuan/mt before closing at 18,685 yuan/mt, down 40 yuan/mt or 0.21% from the previous trading day. LME aluminium opened at $2,179/mt on Wednesday with its high and low at $2,192.5/mt and $2,171.5/mt respectively before closing at $2,175/mt, a decrease of $6/mt or 0.28% from the previous trading day.

On the macro side, US business activities came to a near standstill in August and growth hit slowest pace since February. And demand for new business in huge services sector shrank. Market participants will focus on Fed Chairman Jerome Powell’s speech at Jackson Hole Conference on Friday for more clues on the path of interest rates. In terms of fundamentals, the amount of domestic ingots is still relatively small. It is difficult for the market to witness a large number of concentrated arrivals of ingots in the short term. Domestic aluminum ingots social inventory is about to fall below 500,000 mt but with the resumption of production in Yunnan, supplies may be gradually restored. In mid-August, the downstream inventory restocking was active, which strengthened confidence over the extended destocking of aluminum products and boosted spot premiums. In the short term, low inventories will still support aluminum prices. However, the uncertain macro sentiment and the expected supply increase will put pressure on the upward trend of aluminum prices. SMM predicted that the short-term aluminum prices will remain volatile, and follow-up attention should be paid to consumption and inventory.