SMM

[SMM Aluminum Morning Meeting Summary: Weak Fundamentals Make It Difficult for Aluminum Prices to Sustain Upward Momentum, Short-Term Price Correction Expected] Macro side, market surveys indicate that signs of a slowdown in US economic growth have become increasingly evident. According to S&P Global data, the expansion rate of US business activity in February fell to its lowest level since September 2023, reflecting cautious sentiment among businesses regarding the economic outlook. Fundamentals side, cost side support continued to weaken; supply side remained stable with slight increases, showing relatively small overall changes; demand side, driven by rising aluminum prices, end-users adopted a wait-and-see approach, while shipments from downstream aluminum semis enterprises showed no significant improvement. The turnover days of raw material inventories at factories struggled to rebound, with procurement mainly based on rigid demand and consumption of finished product inventories. Inventory side, SMM data showed that the total social inventory of domestic aluminum ingots and aluminum billets climbed to 1.194 million mt, surpassing the key thresholds of 1 million mt and 1.1 million mt consecutively, and is now approaching the 1.2 million mt mark. Currently, most suppliers are optimistic about the future aluminum market, and it is expected that after entering March, the inventory turning point will gradually emerge. With policy support, aluminum ingot inventories are expected to remain at low levels for an extended period, and sentiment in the spot market to hold back cargoes has intensified. Under the scenario of strong expectations but weak realities, aluminum prices are experiencing significant fluctuations driven by macro sentiment and trading expectations. However, weak fundamentals make it difficult for aluminum prices to sustain upward momentum, and a short-term price correction is expected.