Short-term Aluminum Prices May Continue to Consolidate

Amid the complex and changing international economic situation, U.S. August non-farm payroll data has again become a focal point for the market. Although the unemployment rate slightly decreased to 4.2%, the increase in employment was significantly below expectations, and the previous value was further revised down. This mixed data has intensified doubts about the strength of the U.S. labor market recovery. The market generally believes that the U.S. job market is steadily cooling, making it difficult for the Federal Reserve to implement a substantial rate cut in September. Therefore, the market strongly anticipates a 25 basis point rate cut in September by the Fed, and this expectation has been largely factored in.

As a result, the U.S. dollar index rebounded from its low, U.S. stocks corrected, and global market risk appetite significantly decreased, which has notably dragged down the metals market. In the Shanghai aluminum market, prices continued to decline. The main contract for September 2410 opened lower and moved lower throughout the day, with weak trading. The closing price was 19,215 yuan/ton, down 70 yuan, or 0.36%. Although trading volume increased, open interest decreased, indicating insufficient market confidence.

Domestically, the National Bureau of Statistics released CPI and PPI data for August, further revealing current economic pressures. CPI rose 0.6% year-on-year, slightly widening, while PPI declined both year-on-year and month-on-month, showing weakness in the industrial production sector. This constrains demand for metals like aluminum but also provides support for prices.

From a supply and demand perspective, the operating capacity of electrolytic aluminum remains stable. While there is some expectation of production recovery in areas like Guizhou and Sichuan, it is unlikely to significantly impact the market in the short term. Demand-wise, although there is some improvement in downstream demand entering the traditional consumption peak season, the overall improvement is not yet significant. Previous aluminum price rebounds had restricted downstream restocking demand, but as aluminum prices fall again, spot transactions have improved and social inventory has started to decline. As of last Friday, inventory data showed a 1.37% weekly increase to 285,947 tons, with inventory levels still relatively high, so future inventory changes need close attention.

Regarding current aluminum price trends, macroeconomic factors remain the biggest disturbance. While there are signs of recovery in seasonal consumption, overall performance is still not outstanding; meanwhile, global recession concerns continue to suppress aluminum prices. Therefore, short-term aluminum prices may continue to consolidate, waiting for external drivers to break the current deadlock. Investors should closely monitor international financial market dynamics, Federal Reserve monetary policy trends, and the actual recovery of domestic consumption demand.