SMM Aluminium Morning Comment

The most-traded SHFE 2312 aluminum contract opened at 18820 yuan/mt in last night trading session, with the lowest and highest at 18800 yuan/mt and 19000 yuan/mt before closing at 18980 yuan/mt, up 170 yuan/mt, or 0.90%. Three-month LME aluminum opened at $2178/mt last evening and closed at $2206/mt, a rise of $30/mt or 1.38%.

China's additional issuance of government bonds and the decline in crude oil prices have brought positive boosts. However, short-term expectations of the Federal Reserve's interest rate hikes and the Palestinian-Israeli conflict has intensified, increasing market uncertainty. Fundamentally, the current operating capacity of the refined aluminum supply side is 42.94 million tons, which is close to the peak. It is difficult to expect a significant increase in the short term. After the Mid-Autumn Festival and National Day holidays, downstream orders and demand have improved but were not as good as expected. Shipments of aluminum ingots and aluminum billet decreased last week. The social inventory of aluminum ingots has not seen a continuous decline. In the short term, aluminum prices are expected to fluctuate rangebound.