SMM Aluminum Market Morning Comment (July 5)

Overnight, the most-traded SHFE 2408 aluminum contract opened at 20,405 yuan/mt, reaching a high of 20,520 yuan/mt and a low of 20,340 yuan/mt, and closed at 20,395 yuan/mt, down 25 yuan/mt or 0.12% from the previous close. LME aluminum opened at $2,547/mt in the previous trading day, hitting a high of $2,552/mt and a low of $2,518/mt, and closed at $2,527/mt, down $22.5/mt or 0.88% from the previous closing price.

Summary: Macro side, the US dollar fell 0.19% overnight, marking its third consecutive decline. This followed the release of weak service and ADP employment reports, which indicated a slowing US economy and increased market expectations for a US Fed rate cut. Fundamentals, domestic aluminum operating capacity is slowly rising, with some capacity in Yunnan, Sichuan, and Guizhou still awaiting resumption. However, downstream aluminum processing and end-user demand have entered the off-season, leaving the aluminum market fundamentals lacking driving factors. Macro sentiment is highly volatile, and aluminum prices are expected to consolidate in the short term. Future attention should be paid to changes in macro sentiment, domestic consumption performance, and inventory changes.