Copper Jumps Initially and Then Pulls Back, Significantly Erasing Weekly Gains; Aluminum Follows Copper Downward [Institutional Commentary]

[Futures Market] The night session of SHFE copper opened lower and fluctuated rangebound. In the morning, it briefly rose to a new high for this round, but weakened in the afternoon, with significant position reduction at the close. The most-traded May contract closed at 80,610, down 0.91%, with intraday fluctuations exceeding 1,200 points. Total volume increased, while total open interest decreased by more than 16,000 lots. SHFE aluminum followed the decline of SHFE copper and was not lifted by the rebound in alumina. The most-traded May contract closed at 20,700, down 0.65%, with total volume decreasing and total open interest falling by more than 13,000 lots. The most-traded May contract of alumina closed at 3,020, up 0.94%.

[Analysis] From last night to today, the US dollar index rebounded, putting pressure on non-ferrous metals. Additionally, as the stock market continued to decline in the afternoon, overall market sentiment weakened, which was unfavorable for copper prices. Today, SHFE copper saw increased volume, jumping initially and then pulling back, significantly erasing the gains of the week. There are signs of short-term adjustments, and attention should be paid to the support at the 80,000 level. News-wise, focus on whether copper smelters will cut production or undergo maintenance during the period when copper concentrate TCs are negative. Aluminum is influenced by both copper and alumina, so watch for support around 20,500.

[Valuation] Moderately High

[Risk] Macro policies below expectations

(Source: China Fortune Futures)