Analysis Of SMM Aluminum Market

1. Spot Market

2. Macroscopic plane

3. Fundamentals

Spot Market

The average spot price of aluminum SMM A00 fluctuated upward this week, up 0.58% on Friday from the previous day, and the weekly increase was about 1.05%. SMM research shows that the resumption of work and production after the holiday has promoted the downstream operating rate of aluminum, and the spot transaction and delivery performance have warmed, but within the storage cycle, the spot supply is sufficient, and this week the spot price is mainly under pressure. Overall, the inventory of aluminum ingots is still continuing to accumulate, but the overall increase and increase in inventory or will slow down, with the gradual strengthening of demand and aluminum ingots, aluminum prices or get some support, next week is expected to rise the discount sideways or slightly expanded.

Macroscopic plane

This week, the macro good resonance at home and abroad, the domestic two sessions held, the release of multiple good to boost investment and consumer demand. The target of 5% economic growth in 2024 has been set. The central bank governor said there was still room for further RRR cuts. Overseas, Powell's speech once again strengthened the market's confidence in the Federal Reserve's interest rate cut, and the US dollar index continued to weaken. The above macro positive have boosted the trend of aluminum prices. The dollar index has been weak recently, falling 0.02% as of 13:07 on Friday, touching a new low since January 16, 2024 to 102.69, six consecutive declines.

                                                                                                                         Fundamentals

Supply side: The domestic electrolytic aluminum operation capacity is stable as a whole, the short-time power failure of the aluminum plant in Inner Mongolia last week affected the normal operation of some electrolytic cells, but the enterprise is now fully repaired in the tank, the overall impact on output is small. Within the week, the market is still continuing to ferment the news of the resumption of electrolytic aluminum production in Yunnan, according to SMM research that the current reduction in power supply and wind power generation in and outside the province has increased, the local government encourages industrial consumption of electricity, but the company feedback to the higher price. Because electrolytic aluminum enterprises are continuous processes and have high requirements for stable supply of power, the province is still in the dry period, and the future power is still unclear, the electrolytic aluminum in Yunnan is more complicated in the performance of production resumption in March. As of press time, the four electrolytic aluminum enterprises have clearly reported the production resumption arrangement, SMM expects that there may be a small amount of production resumption in Yunnan in the future. However, the mass resumption of production still needs to be in the wet season. In terms of imports, Russian railway sector data show that in January and February this year, Russian aluminum (Rusal) aluminum exports increased 14.6% year-on-year to 458,000 tons. In January, aluminum exports rose 30 percent from a year earlier. Since the end of last year, the domestic has opened special trains from Russia to Nanyang and Liaoyang, and most of the increase in Russian aluminum exports comes from domestic imports. Stock: According to SMM data show that on March 7, SMM counted the total social inventory of electrolytic aluminum ingots of 821,000 tons, and the domestic circulating electrolytic aluminum inventory of 695,000 tons, which was 5,000 tons more than that of this Monday, 32,000 tons more than that of last Thursday, and a total of 330,000 tons more than that of the pre-holiday. After entering March, the rhythm of aluminum ingots accumulation continued but slowed down significantly. It is the lowest level in the same period of nearly seven years. Pay attention to the inventory change in the third week after the Spring Festival in the past six years, only an increase of 32,000 tons and an increase of 4.1% are strong. SMM believes that after entering the traditional peak season in March, the consumption of aluminum ingots inventory is expected to accelerate, the overall increase and increase of domestic aluminum ingots inventory will slow down, with the further strengthening of aluminum ingots, SMM expects that in the first half of March, the overall domestic aluminum ingots inventory will still show a weak accumulation trend, or will run in the 800,000-900,000 tons range. The inventory peak will appear near 85-900,000 tons, basically in line with SMM's expectations of domestic aluminum ingot inventory before the festival, and it is necessary to pay close attention to the recovery of domestic consumption after the festival and the performance of the downstream peak season. At present, due to the continuous opening of the import window, it is necessary to pay attention to the interference of the import source, and the domestic electrolytic aluminum enterprises still have a certain amount of inventory in the plant, and the subsequent need to pay close attention to these inventory risk points.