CITIC Futures: Escalating Geopolitical Conflicts Increase Supply Concerns, Aluminum Prices Fluctuate and Rise

On the macro front, U.S. economic data continues to show structural divergence. Geopolitical tensions and conflicts in the Middle East have further escalated, but going forward, macro expectations are expected to remain positive. On the supply side, domestic completed capacity stays stable, and smelting profits remain at a high level; constrained by factors such as power, Indonesia’s potential for increased supply over the medium term still faces limitations. On the demand side, the weekly initial plant operating rate shows a slight rebound, but the restraining effect of high prices on demand remains. Spot prices continue to trade at a discount. On the inventory side, weekly social inventories continue to accumulate; the proportion of molten aluminum is expected to decline. Going forward, attention should be paid to demand performance and changes in inventories. Overall, despite recurring swings in market sentiment, supply-and-demand tightness expectations remain unchanged. Aluminum prices are expected to stay range-bound but with a bullish bias. (CITIC Futures)