》Check SMM aluminum product quotes, data, and market analysis
SMM News on June 23:
Today, the most-traded SHFE aluminum 2507 contract opened at 20,425 yuan/mt, with a high of 20,580 yuan/mt, a low of 20,340 yuan/mt, and closed at 20,365 yuan/mt. Trading volume was 181,000 lots, and open interest was 253,000 lots.
SMM Commentary: On the macro front, there was a clear divergence in the US Fed officials' statements on interest rate cuts, while geopolitical conflicts heightened bullish sentiment in the market. On the fundamental front, the operating capacity of domestic aluminum smelters remained stable, with the proportion of liquid aluminum maintaining a high level, and the market supply of casting ingots remained tight. SMM learned that a few aluminum smelters slightly increased their casting ingot output this week, but it was still difficult to change the overall tight supply situation in the market. On the demand side, overall, most downstream sectors were in the traditional off-season. Downstream production cuts in central China were notably reported, with weak spot aluminum transactions in the region and significant discounts in market transaction prices. From the perspective of downstream demand sectors, the weakening off-season demand in the PV and home appliance sectors cannot be ignored, with a notable decline in the operating rates of related sectors. The wire and cable sector also experienced a decline in operating rates due to the completion of the previous delivery period and high aluminum prices. In terms of inventory, the destocking pace slowed, and low inventory still provided support to the futures market. Inventory buildup was observed on Monday this week, and it is necessary to observe whether the inflection point of destocking has officially formed. However, spot premiums/discounts gradually pulled back. In summary, the domestic favorable macro environment remains unchanged. On the fundamental front, the low inventory of domestic aluminum ingots supports aluminum prices, but the weakening off-season demand in the downstream sector is evident. Spot premiums/discounts may fall back from highs, and subsequent focus should be on changes in inventory and demand.
Today, the most-traded alumina 2509 contract opened at 2,886 yuan/mt, with a high of 2,955 yuan/mt, a low of 2,873 yuan/mt, and closed at 2,096 yuan/mt. Trading volume was 335,000 lots, and open interest was 286,000 lots.
SMM Commentary: Last week, some alumina refineries completed maintenance and resumed production. Meanwhile, considering the cost of ore, there were new reports of production cuts. The operating capacity of alumina refineries increased and decreased in parallel. Overall, the operating capacity of alumina refineries decreased by 440,000 mt/year MoM to 88.57 million mt/year last week. Spot alumina supply remained loose, and the total inventory of alumina at aluminum smelters increased by 8,600 mt to 2.655 million mt last week. In the short term, the alumina fundamental front is expected to maintain a relatively loose pattern, and alumina spot prices are expected to drop back slightly. Subsequent attention should be paid to changes in the capacity of domestic alumina enterprises and their profitability.
Today, the most-traded cast aluminum alloy 2511 contract opened at 19,665 yuan/mt, with a high of 19,880 yuan/mt, a low of 19,640 yuan/mt, and closed at 19,680 yuan/mt. Trading volume was 4,000 lots, and open interest was 82,000 lots.
SMM Commentary: Last Friday, SMM A00 aluminum prices fell by 50 yuan/mt from the previous trading day to 20,720 yuan/mt. Domestic SMM ADC12 prices also decreased by 50 yuan/mt to 19,900-20,200 yuan/mt. As aluminum prices continued to decline, market quotes diverged. Some enterprises actively lowered their quotes due to sluggish demand, while others remained firm temporarily due to cost pressure. Overall, the rigid support of costs and weak demand during the off-season continued to clash, leading to a fluctuating rangebound in ADC12 prices. As the off-season deepens, it is expected that ADC12 prices will continue to fluctuate rangebound in the short term. Continuous attention should be paid to the circulation of raw materials and the marginal fluctuations in demand during the off-season.
[The information provided is for reference only. This article does not constitute direct advice for investment research decisions. Clients should make cautious decisions and should not replace their independent judgment with this information. Any decisions made by clients are unrelated to SMM.]
