Shanghai Aluminum main company from Monday to Thursday this week trend is relatively stable, by the domestic favorable policies, demand is good, destocking and other factors boosted by the price rose sharply on Friday, brushing a new high of 19,745 yuan / ton since January 3, 2024, as of Friday's day close, the weekly increase of 1.55%, the weekly line rose five times in a row.
As Friday falls on Good Friday, the LME is closed. From Monday to Wednesday, London aluminum fluctuated and weakened, and rose sharply on Thursday night, brushing a new high of $2340.00 / ton since January 2, 2024, as of Thursday's close, London aluminum rose 1.13% weekly, and rose three times in a row.
Changes in the trend of Shanghai Aluminum Main Company and London Aluminum:
spot market
This week, the average spot price of SMM A00 aluminum fluctuated, with a weekly increase of 0.88%. SMM research shows that, on the whole, the current spot supply is sufficient, aluminum prices are running at a high level, and aluminum spot may maintain a discount in the short term.
SMM A00铝现货均价变化走势：
Macroscopic
Domestic: The domestic side continued to introduce good information to boost market confidence, the governor of the central bank said that there is still sufficient policy space and rich tool reserves in the future, Beijing relaxed the policy of housing purchase restrictions, and the State Council said that it vigorously promoted the reduction of production and operation costs of enterprises. On March 28, Li Qiang, member of the Standing Committee of the Political Bureau of the CPC Central Committee and Premier of the State Council, pointed out that promoting a new round of large-scale equipment renewal and trade-in of consumer goods is of overall strategic significance, which is beneficial to both the current and the long-term, both stable growth and transformation, and both enterprises and people's livelihood. All regions and departments should earnestly unify their thoughts and actions to the decision-making and deployment of the Party Central Committee, adhere to the market-oriented and government-guided, insist on encouraging the advanced and eliminating the backward, adhere to the guidance of standards and orderly improvement, respect the wishes of enterprises and consumers, strengthen policy support, pay attention to classified implementation, grasp the priorities, and solidly promote the four major actions of equipment renewal, consumer goods trade-in, recycling and recycling, and standard improvement, and strive to form the endogenous power and scale effect of upgrading. It is necessary to carefully organize and implement, strengthen overall coordination, strengthen policy publicity and interpretation, and do a good job in implementing it according to local conditions, so as to ensure that large-scale equipment renewal and consumer goods trade-in work achieve solid results.
Overseas: The U.S. dollar index fluctuated this week, with a weekly increase of 0.21% as of 13:58 on Friday, and three consecutive weekly gains. According to CME's "Fed Watch", the probability that the Fed will keep interest rates unchanged in May is 95.8%, and the probability of a cumulative rate cut of 25 basis points is 4.2%. The probability that the Fed will keep interest rates unchanged until June is 36.4%, the probability of a cumulative 25 basis point rate cut is 61.0%, and the probability of a cumulative rate cut of 50 basis points is 2.6%. A number of ECB officials overseas have made comments in support of interest rate cuts.
To sum up, the domestic good news is frequent, the economy is steadily improving, and European and American countries are expected to cut interest rates, which is good for commodity prices. Pay attention to the U.S. core PCE price index for February y/y, personal spending for February, and core PCE price index for February on Friday night.
Fundamentals
Supply side: the week of domestic electrolytic aluminum operating capacity in a narrow range of fluctuations, part of the electrolytic aluminum in Yunnan has begun to resume production, it is expected that the first batch of resumption of production involving more than 500,000 tons of electrolytic aluminum will be completed around the end of April, the rest of the remaining capacity resumption or due to the lack of drought and hydropower supply in the region and put on hold, Guizhou Anshun aluminum industry has not heard the exact resumption of production news in the week, the average daily output of domestic electrolytic aluminum in March remained stable month-on-month, the industry output increment needs to increase slightly in mid-April, SMM is expected to produce 3.56 million tons of domestic electrolytic aluminum monthly output in March, an increase of 4 year-on-year% or so.
Trend of monthly output of domestic electrolytic aluminum:
In terms of imports, according to customs data, the total domestic primary aluminum imports from January to February were 472,000 tons, an increase of 214.7% year-on-year, the total domestic primary aluminum exports from January to February were 985 tons, a year-on-year decrease of 73%, and the total net imports from January to February were about 471,000 tons, an increase of 221.9% year-on-year.
From January to February, China's electrolytic aluminum import window was opened for a long time, especially in January, when the import window was opened for about 20 days, and the net import from January to February increased by 221.91% year-on-year, reaching a total of 471,000 tons. The large inflow of imported primary aluminum into China has had a certain impact on the domestic primary aluminum market, which has affected the domestic aluminum ingot inventory to a certain extent. Taking into account factors such as long orders, SMM expects that primary aluminum will maintain a net import status in 2024, and the average monthly net import volume will remain high.
Inventory: In late March, with the deepening of the traditional peak season process of "Golden Three, Silver and Four", the operating rate of aluminum downstream processing continued to rise, driving the performance of domestic aluminum ingot social inventory to improve, and the inflection point of aluminum ingot inventory initially appeared at the end of March, which was basically in line with SMM's previous expectations.
According to the latest statistics from SMM, on March 28, the total social inventory of domestic aluminum ingots was 865,000 tons, and the inventory of tradable electrolytic aluminum was 739,000 tons, down 05,000 tons from Monday, a decrease of 0.6%, ushering in the first depot after the Spring Festival.
Changes in the general library of aluminum ingots in different regions in China:
Demand side: the domestic downstream started a slight increase in the week, of which the profile sector orders continued to return to large and medium-sized enterprises; the aluminum rod processing fee is weak, stimulating the downstream profile enterprises to replenish the warehouse of aluminum rods instead of aluminum ingot products self-produced aluminum rods, and the inventory of aluminum rods in the week to maintain the situation of destocking; the plate, strip and foil industry as a whole remains stable. During the week, aluminum prices fluctuated strongly, the downstream willingness to receive goods was poor, the domestic spot was sufficient, and the spot discount expanded.
SMM outlook
On the whole, the domestic electrolytic aluminum on the supply side of the fundamentals is expected to grow steadily, and the large import volume of aluminum ingots has impacted the domestic primary aluminum market, and the primary aluminum spot market continues to be discounted, but the current domestic aluminum social inventory has peaked, and at the same time, the downstream demand is expected to support aluminum prices. SMM expects aluminum prices to fluctuate next week, focusing on macro sentiment at home and abroad and changes in domestic aluminum social inventory.