From a macro perspective, the July US Fed meeting minutes showed that most policymakers believe the upside risks of inflation exceed the downside risks of employment, leading to a cooling of interest rate cut expectations, with market focus on the global central bank annual meeting this Friday. Affected by this, the US dollar rebounded slightly during the week, exerting some pressure on base metals; domestically, relevant meetings proposed that strong measures will be taken subsequently to consolidate the real estate market, with market sentiment leaning optimistic.
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From a fundamental perspective, on the supply side, with the commissioning of a small amount of replacement capacity, production increased slightly; cost-wise, the full cost of domestic aluminium was RMB 16,718 per tonne, down RMB 20 per tonne W-o-W, with industry profits still maintained around 3,960 per tonne.
The demand side remains the core focus for the market going forward. When aluminium prices operated around RMB 20,500 per tonne during the week, restocking by downstream enterprises increased, with some companies starting to stockpile for improved orders in the upcoming peak season. However, as aluminium prices rebounded, end-user shipments declined again, and spot procurement by processing material enterprises decreased significantly.
Overall, high aluminium prices exert some pressure on off-season consumption, but as the peak season approaches gradually, expectations for improved orders strengthen. During the week, aluminium ingot inventory pressure decreased, with inventory dropping slightly to 596,000 tonnes, and the SHFE aluminium backwardation structure strengthened slightly, supporting aluminium prices to rebound again above RMB 20,600 per tonne.
In summary, short-term consumption shows only marginal improvement, and aluminium ingot inventory faces renewed buildup pressure, but the current total inventory is not high. Additionally, some secondary aluminium enterprises in provinces such as Anhui and Jiangxi have received notices of termination of tax rebate policies, posing a risk of declining capacity utilisation rates for scrap utilisation enterprises, which provides some support for primary aluminium consumption.
Subsequent aluminium prices need to await the realisation of peak aluminium consumption season. It is expected that the SHFE aluminium trading range will be RMB 20,500-20,800 per tonne next week, and the LME aluminium trading range will be USD 2,540-2,600 per tonne.
The model predicts that the closing price of the most-traded aluminium contract from this Friday to next Thursday (2025-08-28) will operate within a range of [20,265, 20,845], with a price centre of RMB 20,560, in yuan/mt. The extreme price range is [19,890, 21,220], the normal price range is [20,140, 20,970], and the conservative price range is [20,390, 20,720]. Next week's price trend is expected to fluctuate within a range-bound or stagnant pattern. The support range is [20,140, 20,390], and the resistance range is [20,720, 20,970].
Note: This article has been issued by SMM and has been published by AL Circle with its original information without any modifications or edits to the core subject/data.
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