Yesterday, aluminum prices settled down by -1.53% at 209.25 amid mounting demand concerns from top consumer China. The Chinese government refrained from implementing targeted stimulus measures to address the aggressive slowdown in the manufacturing sector. Instead, it reiterated its focus on steering the economy towards advanced technologies and new energies. Despite this, the total social inventory of aluminum ingots in China decreased by 7,000 metric tons week-on-week to 790,000 metric tons, but it remains 254,000 metric tons higher year-on-year. China's lowering of deposit rates and Canada's rate cut aligned with expectations, increasing global market liquidity. On a macro level, the Third Plenum of the Communist Party of China, which aims for comprehensive reforms, is expected to stabilize market confidence.
Aluminum inventories in Shanghai Futures Exchange warehouses fell by 0.6% from last Friday. Global primary aluminum output in June rose by 3.2% year-on-year to 5.94 million tons, with first-half 2024 production up by 3.9% to 35.84 million metric tons, driven mainly by higher production in China. China's first-half aluminum output grew by 7% to 21.55 million tons, with June's production the highest in nearly a decade. The International Aluminium Institute (IAI) estimated China's production at 21.26 million tons for January-June, up 5.2%. The premium for aluminum shipments to Japanese buyers for July to September was set at $172 per metric ton, up 16%-19% from the previous quarter.
Technically, the market is under fresh selling pressure with a 4.33% increase in open interest to settle at 5127, while prices fell by 3.25 rupees. Aluminum is currently supported at 207.4, with further support at 205.6 levels. Resistance is likely at 212, and a move above this level could see prices testing 214.8.