ShouChuang Futures: Strait passage unresolved, aluminum prices fluctuate widely

Macroeconomic bearish signals triggered market panic, dragging aluminum prices sharply lower. Last night, LME aluminum saw a straight, one-line plunge, while Shanghai aluminum opened significantly lower, with the decline nearing 6%. Aluminum prices fell to around 23,000 yuan. However, the blockade of the Strait of Hormuz remains in place. It is reported that Bahrain Aluminum, due to the closure of the Strait of Hormuz, currently ships 40%-60% of its export products outward through Jeddah Port in Saudi Arabia. However, at present, raw material alumina production is facing severe constraints; its current alumina inventory is only enough to sustain production for about one month, and the company is looking for other ways to import alumina. The aluminum supply side is still under pressure.

After the sharp drop, aluminum prices rebounded. Today, aluminum prices continue to rebound, largely recouping the losses from the overnight session. Prices have risen to above 24,000 yuan. At the moment, improvements in aluminum fundamentals are limited; high prices are suppressing downstream demand. Domestic aluminum inventories are above 1.3 million tons and are still accumulating slightly, with substantial overhead pressure. Our company believes that although there are concerns about overseas supply, aluminum prices are still under pressure at current high levels, and there may still be a possibility of a small further dip.