SHFE aluminum fluctuates, social inventory continues to decline [[SHFE lead] closing comment]

SHFE aluminum fluctuated during the day, with the most-traded contract closing down 0.1%. The fundamental changes in aluminum were relatively small, with demand still showing resilience and social inventory continuing to decline, providing some support for aluminum prices.

On the macro front, the US eased its tariff policy last week, and the domestic Political Bureau meeting was held, making the macro front relatively warmer than before, but the boost was limited. Jinyuan Futures stated that the market's digestion of the news of tariff easing and positive domestic policies would drive some bargain-hunting buying in the market. However, it also needs to be noted that there is an imbalance with the US's clear intention to raise tariffs, and economic data is mixed, with global demand concerns still lingering.

Domestic peak-season demand remains resilient. Coupled with the May Day holiday, downstream factories may experience a slight inventory buildup, while aluminum ingot inventory continues to decline. The resilience of consumption and the decline in social inventory provide support for aluminum prices. However, it is now approaching the end of the traditional peak consumption season, and there are still uncertainties in exports, so there may be gradual pressure to slow down consumption in the future.

Regarding the current trend, Xinhu Futures stated that the recent improvement in macro sentiment, coupled with the economic stimulus signals released by the domestic Political Bureau meeting, has helped boost prices to continue rebounding. The current fundamental performance is moderate, with domestic consumption showing resilience and no significant changes on the supply side, while inventory continues to decline, all of which provide the impetus for aluminum prices to rebound. However, there are latent concerns on the consumption side in the later stage, and the negative impact of the US tariff policy will gradually emerge. The decline in exports of terminal commodities will be transmitted to the aluminum processing sector. The positive macro sentiment in the short term is conducive to aluminum prices holding up well.