Aluminum Prices Firm as Demand Enters Peak Season

Aluminium Ingot

18 Sept 20242 Min ReadDaily Market Report

Aluminum prices remain stable amid declining inventories, a weaker dollar, and expectations of a US Federal Reserve rate cut. As the market enters the peak consumption season, prices are expected to remain firm due to strong fundamentals and production cuts overseas.

Aluminum Price

As of last day, LME opened at $2517/ton & closed at $2506.4/ton. Today LME opened at $2312/ton.
As of last day, SHFE opened at 19,775 Yuan/ton and closed at 19,745 Yuan/ton. As of today, SHFE opened at 19,890 Yuan/ton.
As of last day, MCX closed at 229.95 Rs/Kg. Today, the market opened at Rs 229.45/Kg.

Aluminum Supply and Demand

In just one night, the LME aluminum cash bid price rose by $100.50 per ton, while the official settlement price increased by $100 per ton, reaching $2,504.50 and $2,505 per ton, respectively. Analysts attribute this price surge to several factors: 1) declining inventories, 2) a weaker dollar, and 3) expectations of a larger rate cut from the US Federal Reserve. With this latest increase, the LME aluminum benchmark price has climbed $211.50 per ton from the previous month, now standing at $2,293.50 per ton.
On the same day, the 3-month bid and offer prices hit $2,518 and $2,518.50 per ton, representing an unprecedented overnight growth rate of 4% from the prior day. The bid and offer prices for December-25 surged by $93 and $87 per ton, reaching $2,615 and $2,620 per ton, respectively.
Additionally, LME aluminum opening stocks decreased by 3,500 tons on September 16, now totaling 817,350 tons. Live Warrants and Cancelled Warrants ended at 350,225 tons and 467,125 tons, with the former remaining steady and the latter decreasing by $3,500 per ton.

Aluminum News

Saudi Arabian Mining Co., or Ma’aden, has entered into a non-binding agreement with Aluminium Bahrain B.S.C. (Alba) to explore the creation of a global aluminum producer.

Expert Opinion

On the macroeconomic front, the US Federal Reserve will announce its interest rate decision on Wednesday afternoon Eastern Time. A rate cut seems certain, but there’s still debate in the market regarding how significant that cut will be. On the fundamentals side, domestic aluminum supply is expected to remain stable in the short term, while there are production cuts happening overseas, and future supply is approaching its peak.
Demand-wise, the market is entering the peak consumption season, with robust aluminum demand and a notable decrease in aluminum social inventory. Given the strong fundamentals and ongoing macroeconomic uncertainties, aluminum prices are likely to consolidate firmly.