SHANGHAI, November 30(SMM) –
Overnight, the most-traded SHFE 2401 aluminum contract opened at 18565 yuan/mt, with low and high at 18520 yuan/mt and 18615 yuan/mt before closing at 18600 yuan/mt, down 50 yuan/mt or 0.27%. LME aluminum opened at $2224/mt in the previous trading day, with its low and high at $2207.5/mt and $2231.5/mt respectively before closing at $2217.5/mt, down 0.18%.
On the macro level, as the U.S. economic growth in the third quarter once again exceeded expectations, the U.S. dollar index rebounded from a low of more than three months, but failed to stabilize at the 103 mark. At the same time, geopolitical risks in the Middle East have eased, expectations for further interest rate hikes by the Federal Reserve have cooled. Overseas market sentiment has tended to be positive recently. In terms of fundamentals, aluminum ingot inventory has entered a downward trend. Due to aluminum production cuts in Yunnan, domestic operating production capacity has dropped to around 41.8 million mt, easing supply-side pressure. Due to recent exchange rate fluctuations, the import window has shown signs of opening. The inflow of imported goods will add to domestic supply. The performance of downstream operating rates is weak in the off-season. The PMI for domestic aluminum processing sectors was below 50%, indicating contraction territory, with production and order index both weak. SMM believes that the sharp intraday drop in SHFE aluminum on Wednesday was mainly affected by the recent poor downstream consumption and the concentrated entry of shorts for hedging. Short-term aluminum prices may struggle to find further support.
