SHFE aluminium consolidates at highs, short-term correction continues; alumina adds positions and rebounds, but weak trend remains unchanged

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Today, the SHFE aluminium 2608 contract opened at RMB 23,075 per tonne, reached a high of RMB 23,095 per tonne, dipped to a low of RMB 22,850 per tonne, and finally settled at RMB 23,060 per tonne, down RMB 10 per tonne or 0.04 per cent from the previous trading day. Trading volume was 165,200 lots and open interest was 227,700 lots, with a daily position drop of 4,248 lots. The price remained above the MA5 (22,960) and MA10 (22,822) but below the MA20 (23,332.75), MA40 (23,895.50), and MA60 (24,234.17).

The short-term repair continued, but medium and long-term moving average pressure persisted on the upside. On the MACD indicator, the DIFF (-377.42) was above the DEA (-403.42), and a bar value of 52 was recorded. Short-term bearish momentum continued to narrow. Trading volume rose compared to the previous day, but the daily position drop of 4,248 lots showed continued capital outflow, suggesting insufficient upward momentum in the futures.

SMM commentary: Indirect technical talks between the US and Iran made progress as discussions focused on fund repatriation and strait security, and consultations on the nuclear issue are about to start. The geopolitical risk premium continued to converge, while disputes over the management of the Strait of Hormuz persist, leaving the strait's resumption of navigation still uncertain.

A hawkish shift by the US Fed boosted the US dollar index, weighing on base metals prices. Aluminium prices in and outside China fell amid macro headwinds. In the short term, bearish factors dominated and aluminium prices are expected to continue in the doldrums.

Today, the alumina 2609 contract opened at RMB 2,704 per tonne, reached a high of RMB 2,728 per tonne, dipped to a low of RMB 2,698 per tonne, and finally settled at RMB 2,720 per tonne, up RMB 11 per tonne or 0.41 per cent.

Trading volume was 187,400 lots and open interest was 349,400 lots, with a daily position increase of 3,177 lots. The price reclaimed the MA5 (2,715.20) but stayed below the MA10 (2,750.60), MA20 (2,820.55), MA40 (2,808.73), and MA60 (2,813.25). It rebounded slightly in the short term, but the overall weak pattern has not yet reversed.

On the MACD indicator, the DIFF (-34.63) was below the DEA (-19.66), and a bar value of -29.94 was recorded. Bearish momentum persisted but narrowed at the margin. Trading volume edged up from the previous day, and the daily position increase of 3,177 lots showed some capital inflows. However, the rebound was limited, and nearby moving average resistance warrants close attention in the short term.

SMM commentary: According to SMM statistics, as of this Thursday, China's total alumina inventory edged up W-o-W. By inventory structure, raw material inventory at aluminium smelters continued to destock slightly. However, restocking willingness was weak amid sharp recent price swings and market divergence over the outlook, and end-users mostly stayed on the sidelines.

In-factory inventory at alumina refineries declined, mainly because some northern enterprises carried out periodic maintenance, prioritising the drawdown of in-factory inventory under production constraints. This impact is expected to gradually fade after maintenance ends next week. Port inventory continued to build up, as high port arrivals from outside China supplemented spot supply with imported resources and increased market pressure.

Overall, the oversupply pattern remained unchanged. Before the implementation of Guinea's bauxite quota policy, the market lacked clear bullish drivers. Next week, inventory is expected to shift from mild destocking to slight inventory buildup, supply-demand conditions will stay loose, and alumina prices will continue to consolidate on a weak note.

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.