The most-traded SHFE aluminium 2609 contract closed at RMB 23,345 per tonne today, up RMB 85 per tonne or 0.37 per cent on the day. Trading volume increased notably from the previous session, reaching 208,200 lots intraday.
Volume expanded during the bottom-out rebound, indicating buying support at low levels and heightened tug-of-war between longs and shorts. Current open interest was 296,300 lots, down 5,885 lots.
The simultaneous pullback in open interest and price gains formed a rally-on-declining-open-interest structure, suggesting short-term bears actively covered and exited, rather than new bulls entering aggressively. The upward momentum was biased toward short covering, with limited new buying power.
Macro front, the US- Iran conflict continued to escalate. US forces carried out further airstrikes against Iran on July 17, while Iran launched large-scale attacks on US military targets in Kuwait and Syria, and struck US facilities in Bahrain. Amid repeated Middle East tensions, concerns over interest rate hikes persisted.
Supply continued to recover, but the destocking trend was hard to reverse in the near term. Under the tug-of-war between longs and shorts, aluminium prices are expected to consolidate with adjustments in the short term. Later focus should be on the progress of production resumptions in the Middle East and geopolitical conflict trends, LME aluminium ingot inventory changes, and China’s downstream processing orders and aluminium semis export data.