Aluminum aluminum futures weak adjustment technology adjustment pressure has increased

Today's Asian City 3-month aluminum futures showed a weak consolidation, underperforming compared to copper and Shanghai Aluminum. The 3-month aluminum contract closed down 0.29% at $1,871. Given the psychological resistance above $1,300, combined with a declining MACD red column on the daily chart, it suggests increasing short-term technical adjustment pressure.

Spot prices for aluminum on April 25th were quoted at 13,380–13,420 yuan/ton on the Yangtze River, with a premium of 75–35 yuan/ton. This marked a significant narrowing from the previous day. According to SMM, despite a reversal in aluminum plate prices, increased pick-ups over the weekend and the holding mentality of market participants kept prices elevated. However, the spot premium dropped sharply, nearly flat against the current month’s aluminum, indicating strong bullish control and active trading in the market.

Looking at the inside plate trend, the Shanghai Aluminum main contract 1407 experienced a fluctuating movement today, closing down 0.84% at 13,575 yuan. It hit a yearly high of 13,760 yuan in February but found support at 13,500 yuan/ton. Currently, the aluminum market term structure remains in a positive order, with a low level and a high level. The price gap between the 1406 and 1407 contracts is 60 yuan/ton, slightly narrower than yesterday.

In terms of market factors, both the German IFO Business Climate Index and the U.S. Durable Goods Orders data released yesterday exceeded expectations, boosting overall market sentiment. Meanwhile, Japan reported a 1.6% year-on-year rise in CPI in March—the largest increase on record—which may reinforce the central bank’s expectation of keeping interest rates unchanged on Wednesday. In Europe and the U.S., there are no major data releases today. Within the aluminum sector, Citigroup forecasts that annual aluminum output will rise by 4.9% to 52.7 million tons in 2014, with demand growth expected to reach 6%, further pushing the supply-demand balance. However, this year’s capacity expansion will still result in a small surplus of 162,000 tons.

Market sentiment indicates that today’s Shanghai Aluminum futures started weaker than copper, partly due to excessive gains in the past two days, which triggered short-term technical corrections. Despite this, the decline was limited as copper prices rose during the day. Strategically, it is advisable to be cautious around the 13,500 yuan level for the 1407 contract in the evening, while keeping an eye on the key resistance at 13,750 yuan.