SunSirs: Macro Positive News Boosted, Aluminum Prices Are Expected to Rise in October

Aluminum prices fell first and then rose in September

Aluminum prices first fell and then rose in September, showing strong performance recently. According to the Commodity Market Analysis System of SunSirs, as of September 27, 2024, the average price of aluminum ingots in the East China market in China was 20,326.67 RMB/ton, an increase of 3.48% from the market average price of 19,643.33 RMB/ton at the beginning of the month (September 1).

Aluminum prices are expected to rise in October

Aluminum prices in October may continue their upward trend from September. The reasons are as follows:

1. Domestic macro positive news was released, and policies were boosting the non-ferrous sector. The central bank has proposed further interest rate cuts and reserve requirement ratio cuts to release liquidity, while also creating a shift towards refinancing to guide listed companies to repurchase and increase their holdings of stocks. At the real estate level, it is proposed to lower the interest rates of existing housing loans and unify the minimum down payment ratio for housing loans. The positive expectations brought by domestic policies, coupled with the positive expectations of terminal demand, have driven aluminum prices to remain firm and improve emotionally. Under the guidance of policy direction, market confidence has returned and sentiment is unlikely to subside in the short term. It is expected that the policy will continue to boost positive sentiment in October.
2. Inventory was in a continuous state of destocking, and Yunnan electrolytic aluminum enterprises on the supply side were nearing the end of resuming production, with high daily output and narrowing upward space; Multiple downstream sectors on the demand side have experienced a rebound in operating rates, with electrolytic aluminum and aluminum rod inventories in a state of slight destocking. The expectations for the Golden September and Silver October are good.

Risk point: Import and export may be affected by foreign policy factors, and some of the US 301 tariff policies will take effect on September 27th. This includes a 100% tariff on Chinese electric vehicles, a 50% tariff on Chinese solar cells, and a 25% tariff on Chinese steel, aluminum, electric vehicle batteries, and key minerals.

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