SMM Morning Comment For Aluminium Market On December 26

SHANGHAI, December 26 (SMM) – Overnight, the most-traded SHFE 2402 aluminum contract opened at 19155 yuan/mt, with low and high at 19085 yuan/mt and 19155 yuan/mt before closing at 19110 yuan/mt, down 105 yuan/mt or 0.55%.
On the macro front, the annual rate of the core PCE price index in the United States in November was lower than expected, and the inflation indicator cooled more than expected. In the third quarter, the actual GDP of the United States was revised downward, and consumption fell short of expectations, which further strengthened expectations that the Fed may turn to interest rate cuts, bringing support to aluminum prices. Domestic macro front continues to be positive. Major state-owned banks have lowered deposit interest rates. This year, China is expected to achieve major goals. In terms of fundamentals, Qinghai Province has implemented power load management due to earthquake relief, and the destocking of aluminum ingot inventories has slowed down, and aluminum ingot inventories may begin to grow in the future. Demand is still expected to remain weak. The traditional off-season has arrived. Companies are prioritising cash flows at the end of the year, thus their willingness to restock has declined. It is expected that the destocking of aluminum ingot social inventory will slow down, but the inventory will still remain low. Low stocks and support from raw materials may keep aluminum prices firm in the short term.