Consumption yet to be realised, SHFE aluminium fluctuated and adjusted today

Today, the most-traded SHFE aluminium 2504 contract opened at RMB 20,550 per tonne, with a high of RMB 20,680 per tonne and a low of RMB 20,540 per tonne, closing at RMB 20,615 per tonne, up 0.34 per cent. The trading volume was 145,000 lots, and the open interest was 204,000 lots.

On the macro side, US President Trump introduced the latest measures that could reshape the global supply chain, instructing the US Department of Commerce to study imposing tariffs on imported copper.

Fundamentals side, cost side support continued to weaken; the supply side saw slight increases, with overall changes relatively small; the demand side, influenced by rising aluminium prices, end-users adopted a wait-and-see approach, and shipments from downstream aluminium semis enterprises showed no significant improvement.

Factory raw material inventory turnover days struggled to rebound, focusing on just-in-need restocking and consuming finished product inventories. Domestic aluminium ingot and aluminium billet social inventories climbed to 1.194 million tonnes, surpassing the key thresholds of 1 million mt and 1.1 million tonnes, and are now approaching the 1.2 million tonnes mark.

Currently, most suppliers are optimistic about aluminium's future market, and it is expected that after entering March, the inventory turning point will gradually emerge. With policy support, aluminium ingot inventories may remain low for an extended period, and sentiment of holding back cargoes in the spot market has intensified. Macro sentiment remains unstable, and consumption realization still requires observation, with the market cautiously adjusting aluminium prices amid fluctuations.

Today, the most-traded alumina 2505 contract opened at RMB 3,405 per tonne, with a high of RMB 3,428 per tonne and a low of RMB 3,336 per tonne, closing at RMB 3,344 per tonne, down 1.53 per cent. Trading volume was 168,000 lots, and the open interest was 174,000 lots.

Recently, reports of minor alumina production cuts and maintenance in northern regions have emerged, coupled with concentrated news of domestic alumina exports, boosting alumina prices and improving market sentiment.

This week, spot alumina prices rebounded slightly. However, with the slight rebound in domestic spot alumina prices and the decline in overseas spot alumina prices, the domestic alumina export window has gradually closed. Currently, alumina's operating capacity remains at a high level, while incremental demand for aluminium is limited.

The fundamental structure has not been completely reversed, and resistance at the top of alumina prices persists. In the short term, alumina prices may enter a phase of fluctuation and adjustment. Moving forward, attention should be paid to the alumina export window and changes in alumina operating capacity.

Source: SMM