The explosion at the Guinea oil depot has sparked supply concerns. Weakness in the US dollar has made dollar-denominated commodities more attractive. London aluminum surged nearly 3.4% to a three-month high in the following week. The rise was driven by active buying from investment funds and solid support from low domestic inventories. Aluminum prices in China are expected to remain high in the short term.
On December 22nd, LME aluminum stocks rose by 500 tons to 508,650 tons. On the same day, spot aluminum prices in China were reported at 19,115 yuan/ton for Jiangsu A00 aluminum ingots, up 160 yuan/ton, and 19,120 yuan/ton for Chinalco East China A00 aluminum ingots, up 160 yuan/ton. The active buying from investment funds has driven the strength of aluminum prices, and the low domestic inventory has provided strong support. Additionally, last Friday, China’s five major banks lowered some deposit rates, which investors viewed as a positive signal for further interest rate cuts to stimulate economic growth, significantly boosting market sentiment and further pushing up aluminum prices.
Furthermore, the surge in LME aluminum futures last Friday reached a three-month high, also driving up domestic futures markets. It is expected that Shanghai aluminum will remain at a high level in the short term, and spot aluminum may rise today.