Macro perspective, US Fed Governor Waller explicitly supported an interest rate cut this month and planned multiple subsequent cuts, signalling easing. Meanwhile, the US Treasury Secretary began interviewing candidates for the next Fed chair this week. Former President Trump had persistently pressured for rate cuts and threatened to dismiss Powell, while economists jointly voiced support for Fed Governor Cook to maintain its independence, boosting market expectations for Fed easing. Additionally, US July JOLTS job openings fell to 7.181 million, exceeding the expected decline, reflecting cooling labour market demand and further reinforcing the necessity for Fed rate cuts. Overall, the macro environment created favourable conditions for the aluminium market.
Fundamentals showed a mixed picture: inventory side, aluminium ingot inventory in major domestic consumption areas showed a buildup. On September 4, SMM statistics showed domestic mainstream consumption area aluminium ingot inventory at 626,000 tonnes, up 3,000 tonnes from Monday and 6,000 tonnes from last Thursday. LME aluminium inventory saw a slight short-term decrease, down 0.34 per cent over the past week, but accumulated a 3.42 per centincrease over the past month, indicating persistent overall inventory pressure. Supply side, the commissioning of a small amount of replacement capacity pushed operating aluminium capacity to a slight increase, with production edging up. The proportion of liquid aluminium may rebound in September. Cost side, weekly changes were relatively small, and the industry maintained high profits. Although the demand side was the market focus, with the September-October peak season approaching, operating rates in downstream sectors such as aluminium extrusion and aluminium plate per sheet, strip, and foil showed signs of recovery last week. However, consumption had not fully materialised, and subsequent peak season demand realisation needed continuous monitoring.
Integrating macro and fundamental information, aluminium prices in the traditional September peak season were more likely to rise than fall overall, but top-side pressure remained. For aluminium prices to effectively break through the key resistance level of RMB 21,000 per tonne, the realisation of peak season consumption expectations during the September-October period was needed. In the short term, prices were expected to fluctuate at highs.
