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US ‘terrifying data’ of strong growth dampens metal market; aluminum prices may fall on the 18th

Strong growth in US retail data intensifies concerns about interest rate cuts, leading to pressure on the outlook for metal demand. Risk asset prices are under pressure again as a result. Overnight, aluminum on the London Metal Exchange (LME) fell by over 1.7%, with the market showing signs of weakness. The downstream acceptance of high prices is weak, and aluminum is expected to fall today.

Strong growth in US retail data intensifies concerns about interest rate cuts, putting pressure on the outlook for metal demand. Risk asset prices are under pressure again as a result. Overnight, aluminum on the LME fell and hit a low point, closing with a large downward candle at $2176 per tonne, down $38 or 1.72%. Trading volume increased by 2011 lots to 18967 lots, while open interest decreased by 25933 lots to 687503 lots. In the evening session, Shanghai aluminum fluctuated narrowly at a low level and closed with a downward candle. The latest closing price for the main contract 2403 was 18760 yuan per tonne, down 110 yuan or 0.58%.

The latest LME aluminum inventory on January 17th was reported at 557,675 tonnes, a decrease of 875 tonnes from the previous trading day, down 0.16%.

On January 17th, the spot price of aluminum was reported at 18985 yuan per tonne for the Yangtze River spot A00 aluminum ingot, up 40 yuan per tonne, and 19010 yuan per tonne for the East China A00 aluminum ingot, up 60 yuan per tonne. US December retail sales data exceeded market expectations, further suppressing expectations of an early interest rate cut by the Federal Reserve, thereby boosting the US dollar to a one-month high and weakening the morale of the metal market. Meanwhile, the rapid decline in new home prices in China has once again put pressure on market sentiment. Although industrial output has shown signs of improvement, the real estate market still faces challenges. Even with a series of stimulus measures taken by the government, there has been no significant turnaround in the real estate market. As the major consumer of industrial metals, the weakness in the real estate industry inevitably affects the consumption outlook for metals. In addition, the downstream acceptance of high prices is weak, and actual demand is suppressed by high prices, leading to a significant reduction in market trading activity and an overall subdued market atmosphere. In the short term, the market is expected to remain volatile, and aluminum is expected to fall today.

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