SMM

On the macro front, the U.S. dollar index continued to decline. The annual rate of the U.S. core PCE price index in November was lower than expected, the inflation indicators cooled more than expected, and the U.S. dollar index continued to decline. Domestic macro environment remained positive. After major state-owned banks lowered deposit rates, joint-stock banks have also lowered deposit rates. The macro front was bullish for base metal market. In terms of fundamentals, the domestic aluminium supply remained stable. Recently, overseas aluminium prices have been significantly boosted thanks to macro tailwinds. Domestic primary aluminium imports have suffered a large loss. The aluminium ingot import window was closed. The amount of domestic aluminium ingot remained low. Due to the sluggish demand and environmental protection-driven restrictions in major consumer areas, the aluminium social inventory is still expected to accumulate significantly. Before entering the inflection point of inventory accumulation, low inventory and cost-side fluctuations combined with macro tailwinds will still drive aluminium market. It is expected that the most-traded SHFE aluminium will fluctuate between 18,690-19,800 yuan/mt, and LME aluminium may run between $2,300-2,460/mt. In the future, market players should keep a close eye on domestic supply and demand and macro sentiment.