SMM Aluminum Market Morning Comment (May 14)

Overnight, the most-traded SHFE 2407 aluminum contract opened at 20,680 yuan/mt, with the highest and lowest prices at 20,745 yuan/mt and 20,635 yuan/mt before closing at 20,665 yuan/mt, up 155 yuan/mt or 0.76%. LME aluminum opened at $2,520.5/mt in the previous trading day, with its low and high at $2,508/mt and $2,556.5/mt respectively before closing at $2,547.5/mt, up 1.07%.

Summary: On the macro front, the expected one-year inflation rate in the US hit a recent high. The US CPI data will be released this week, providing more data support for the Fed to formulate monetary policy. The domestic Ministry of Finance issued ultra-long-term special government bonds, and market funds are expected to be introduced into real enterprises to support the real economy. Fundamentally, the sharp increase in LME aluminum inventories will bring pressure on aluminum prices. Domestic inventories of aluminum ingots and billets continued to drop after the holiday, but inventory of aluminum ingots only decreased by 10,000 mt YoY. Domestic supply and demand contradictions may gradually emerge. Combined with macro sentiment and rising aluminum costs, it is expected that aluminum prices will fluctuate at high levels.