SMM

[SMM Aluminum Morning Meeting Summary: Rising Expectations for US Fed Interest Rate Cut, Aluminum Prices Remain Under Pressure Amid Off-Season Consumption] Summary: On the macro side, expectations for a US Fed interest rate cut have risen, and macro sentiment remains positive, providing a boost to base metals. The US has imposed a tariff hike on India, while India and Russia have signed a deepened cooperation agreement on aluminum, leading to a subtle increase in risk-averse sentiment among investors. In terms of fundamentals, there has been relatively small change in supply, with aluminum production remaining stable with a slight increase. On the cost side, the total weekly cost for the electrolytic aluminum industry is 16,738 yuan/mt, showing minimal change, and the industry's high profits persist. Focusing on demand, under the influence of the off-season, consumption from terminals to processed materials remains weak. The growth rates of industries such as home appliances and PV, which had strong support in the early stage, have slowed down. Some aluminum terminal export orders have also declined, and the construction industry is still experiencing a super-seasonal decline. Social inventory of electrolytic aluminum has exceeded the 550,000 mt threshold. Although there have been fluctuations in inventory data due to uneven arrivals during the week, the high aluminum prices amid the off-season may further damage consumption, and the trend of continued inventory buildup in the short term remains unchanged. Overall, the positive macro environment combined with potential risks in electrolytic aluminum supply has driven aluminum prices to rebound to high levels. However, amid the off-season consumption, the pressure of inventory buildup remains significant. After the positive sentiment is digested, the center of aluminum prices will pull back, and the 21,000 yuan/mt threshold will still be under pressure. Similarly, most processed material enterprises have a relatively high recognition of prices below 20,500 yuan/mt, and their just-in-time procurement capability has been validated to a certain extent at this price level.