Trade barriers continue to escalate, aluminium prices remain volatile at high levels

Futures market: Yesterday, the SHFE aluminium 2504 contract opened at RMB 20,735 per tonne, reached a high of RMB 20,750 per tonne, a low of RMB 20,630 per tonne, and closed at RMB 20,735 per tonne, up RMB 100 per tonne or 0.48 per cent from the previous day. LME aluminium opened at USD 2,645 per tonne, hit a high of USD 2,674.5 per tonne, a low of USD 2,627 per tonne, and closed at USD 2,671 per tonne, up USD 26 per tonne or 0.98 per cent.
 

Macro: (1) Trump: Auto tariffs will be around 25 per cent, and large enterprises related to chips and automobiles will return to the US. (Bullish★★)

(2) The European Commission will swiftly utilise trade protection measures, such as anti-dumping and countervailing duties, when necessary. (Bullish★)

(3) The National Development and Reform Commission (NDRC): Supports private enterprises in actively participating in the "Two Major and Two New" initiatives, intensifies efforts to resolve overdue payments to private enterprises, and expedites the revision and release of the new negative list for market access. (Bullish★★) 

Fundamentals: (1) According to SMM statistics, as of February 18, aluminium ingot inventories stood at 226,200 tonnes in Guangdong, 321,000 tonnes in Wuxi, and 132,000 tonnes in Gongyi, with a total increase of 9,100 tonnes compared to the previous trading day. (Bearish★)

(2) Regarding domestic aluminium billet inventories, Guangdong aluminium billet inventory was 153,300 tonnes, and Wuxi aluminium billet inventory was 68,100 tonnes, with a total increase of 8,000 tonnes. (Bearish★)

Primary aluminium market: During yesterday's morning session, the SHFE aluminium front-month contract hovered around RMB 20,600 per tonne below the daily moving average. In the East China market, inventory pressure remained high, and downstream buying was mainly need-based, leading to a slight expansion in discounts.