SMM

The most-traded SHFE 2404 aluminum contract opened at 19,200 yuan/mt overnight, with its low and high at 19,160 yuan/mt and 19,235 yuan/mt before closing at 19,195 yuan/mt, up 100 yuan/mt or 0.52%. LME aluminum opened at $2,225/mt yesterday, with its high and low at $2,265/mt and $2,225/mt respectively before closing at $2,252/mt, up by $17/mt or 0.76%.

Summary: From a macro perspective, there are growing expectations for overseas interest rate cut. The dovish speeches of Powell have been frequent, and the US dollar index fell sharply, which benefited non-ferrous metals. During the “Two Sessions”, the market had strong expectations for stimulus policies, and exports data was better than expected. Fundamentally, the disturbance in China and overseas supply re-emerged. On the demand, the production resumption after CNY holiday boosted the operating rate of aluminum downstream enterprises. Short-term consumption is still expected to rebound, and spot transactions and outbound performance improved. Aluminum ingots inventory growth slowed down in March. SMM expects domestic aluminum ingot inventories may move between 800,000-900,000 mt in the first half of March, while aluminum billets has been destocked for more than a week. Overall, aluminum prices are likely to grow in traditional peak season in March, and we need to pay attention to aluminum supply, recovery of consumption, and when aluminium ingot and aluminium billets stocks will begin to drop.