IMF Cuts Outlook; Aluminum Market Braces for Volatility

Aluminum Market Overview: Futures and Spot Insights

The aluminum market showed notable movements recently across both domestic and international markets. In the domestic futures market, the Shanghai Aluminum main contract concluded at 20,915 yuan/ton, marking a rise of 130 yuan/ton, translating to a 0.63% increase. Meanwhile, the international scene witnessed LME Aluminum 3M closing at 2,637 US dollars/ton, up by 41.5 US dollars/ton, a 1.6% increase.

Spot Market Dynamics

As of October 22, the A00 Wuxi spot aluminum price ranged between 20,720-20,760 yuan/ton, with an average price of 20,740 yuan/ton, showing a slight drop of 50 yuan/ton. The Shanghai aluminum prices exhibited strong fluctuations in the morning session, while the Wuxi spot market displayed robust performance. Despite the arrival of transshipment sources in South China, the primary focus was on direct delivery terminals.

• The amount of incoming goods remained minimal, with outgoing goods also witnessing a drop compared to earlier periods.
• Holder strategies involved maintaining price levels to ensure shipment, with expectations running high for price stability.
• Downstream demand remained stable, ensuring favorable trading conditions overall.

The Foshan market reported an aluminum ingot spot transaction price of 20,520-20,540 yuan/ton, averaging 20,530 yuan/ton. This was a decrease of 60 yuan/ton compared to the previous trading day. The market activity ranged from flat water transactions in the morning to a slight premium increase by the late session.

Industry News and Inventories

According to Mysteel Inventory Express data, as of October 22, the electrolytic aluminum inventory held steady in major markets. Notably, Wuxi maintained a consistent level, while Foshan saw a mild increase. Conversely, Gongyi experienced a slight inventory reduction.

Data from the National Bureau of Statistics revealed that China's alumina production hit 7.311 million tons in September 2024, a 3.3% year-on-year growth. Similarly, the production of electrolytic aluminum and various aluminum products showcased a steady upward trend.

Market Influences and Future Outlook

Globally, the International Monetary Fund (IMF) has adjusted its economic forecast, highlighting heightened downside risks. Market sentiment remains volatile, especially with the impending US elections. Domestically, China's National Development and Reform Commission has initiated a slew of policies to boost economic activity.

• Railway capacity in the Northwest is on a recovery path, with businesses turning towards increased automobile transportation.
• Heavy pollution warnings in Henan and Shandong could potentially influence the operational dynamics of aluminum processing plants.
• Electrolytic aluminum production capacities in various Chinese regions are on the rise.

While external market sentiments are fluctuating, the steady implementation of domestic economic policies is expected to foster gradual demand transmission for aluminum. Market observers should keep a keen eye on the upcoming manufacturing PMI data and any shifts in US election market expectations.