Macro front, domestic key meetings set a positive tone, with some statements exceeding market expectations, leading to an overall improvement in macro sentiment. Overseas, the US November CPI rose 2.7% YoY, in line with market expectations. The market maintains bets on an interest rate cut in December, with a pause expected in January.
Fundamentals, domestic cost side and tight raw material supply continue to impact aluminum supply. Observing the cost side of the aluminum industry, with the implementation of autumn-winter control measures for alumina enterprises in Lvliang, Shanxi, during 2024-2025, some alumina refineries may face production cuts, keeping alumina prices high. As of this Thursday, the immediate full average cost of domestic aluminum is approximately 21,510 yuan/mt, up 50 yuan/mt WoW. Entering December, Sichuan entered the dry season, with some enterprises undergoing maintenance due to high costs, totaling 205,000 mt. Demand side, the off-season combined with negative export effects led to a decline in new orders for some enterprises, slowing production pace and weakening demand. Inventory, transportation in Xinjiang improved, bringing inventory buildup pressure. However, with inventory levels at a low point, supply-side disruptions persisting, and a warmer macro atmosphere, aluminum prices rebounded during the week.
Technical front, the model predicts the SMM A00 aluminum average price range from this Friday to next Thursday (2024-12-19) to be [20,070, 20,820], with a price center of 20,430 yuan/mt. The extreme price range is [19,770, 21,120], the normal price range is [19,970, 20,920], and the conservative price range is [20,170, 20,720]. Next week's price trend is expected to fluctuate rangebound or fluctuate downward. The support range is [19,970, 20,170], and the resistance range is [20,720, 20,920]. The model predicts the closing price range of the aluminum most-traded contract from this Friday to next Thursday (2024-12-19) to be [20,040, 20,950], with a price center of 20,500 yuan/mt. The extreme price range is [19,740, 21,250], the normal price range is [19,940, 21,050], and the conservative price range is [20,140, 20,850]. Next week's price trend is expected to fluctuate rangebound. The support range is [19,940, 20,140], and the resistance range is [20,850, 21,050].
In summary, after the release of US CPI data, the market expects an interest rate cut next week. Additionally, attention should be paid to the actions of the European Central Bank; if it cuts rates first, it may temporarily push up the US dollar, exerting resistance on base metals. On the demand side, regional divergence persists, with transportation recovery and increased casting ingot production adding inventory pressure. However, supply disruptions at the alumina-aluminum end continue to support aluminum prices. Key fundamentals to watch include alumina refinery production cuts under strengthened winter emission reduction policies, with short-term operating capacity expected to decline, keeping the market in a seller's market. The latest SHFE alumina warehouse warrant stands at 54,000 mt, with total open interest for the alumina 2501 contract at 2.18 million mt, indicating persistent short squeeze risks. Next week, the most-traded SHFE aluminum contract is expected to operate around 20,200-20,800 yuan/mt, while LME aluminum is expected to operate around $2,550-2,700/mt.
Data source: SMM
