Futures: In the night session on March 20, the most-traded SHFE aluminium 2605 contract opened at RMB 24,100 per tonne, hit an intraday high of RMB 24,160 per tonne and a low of RMB 23,450 per tonne, and finally closed at RMB 23,530 per tonne, down RMB 490 per tonne from the previous close, a decline of 2.04 per cent. From a technical perspective, the 5-day (24,304) and 10-day moving averages (24,734) turned sharply downward, forming a bearish alignment, with prices remaining under pressure below short-term moving averages.
The 20-day moving average (24,540) turned into a resistance level. In terms of open interest, night-session open interest stood at 275,000 lots, down 5,300 lots from the daytime session. LME aluminium opened at USD 3,255 per tonne, rose to a high of USD 3,299 per tonne, fell to a low of USD 3,181 per tonne, and closed at USD 3,192 per tonne, down 1.54 per cent. Trading volume was 31,999 lots, down 33,029 lots, and open interest was 684,000 lots, down 5,099 lots.
Macro front: On Saturday evening, US President Trump issued an ultimatum to Iran, demanding that it fully reopen the Strait of Hormuz within 48 hours or face attacks on its power facilities. The US was also considering a plan to seize Kharg Island, Iran’s oil export hub, and US officials said more than 2,000 additional Marines were being deployed to the Middle East.
Iran responded that if its power plants were attacked, it would completely block the Strait of Hormuz and target all energy, information technology, and seawater desalination infrastructure in the Middle East belonging to Israel and the US. (Neutral) As oil prices surged to the highest level in nearly four years, bond traders completely abandoned bets on US Fed interest rate cuts this year, and even saw about a 50 per cent probability of a rate hike by as early as October. Data from the Commodity Futures Trading Commission showed that the US dollar’s safe-haven status was supported, with related futures positions turning net long for the first time this year. (Bearish ★)
Fundamentals: On inventory, aluminium ingot inventory in China’s major consumption regions fell by 2,000 tonnes from last Thursday as of Monday, with the main sources of destocking coming from Gongyi and Shanghai.