SMM Aluminum Market Morning Comment (May 7)

Overnight, the most-traded SHFE 2406 aluminum contract opened at 20,720 yuan/mt, with the highest and lowest prices at 20,830 yuan/mt and 20,705 yuan/mt before closing at 20730 yuan/mt, down 15 yuan/mt or 0.07%. LME aluminum closed on the previous trading day.

Summary: The domestic macro front was intertwined with bullish and bearish factors. Fundamentally, the bauxite supply was tight, and ore prices were solid. The alumina prices rose rapidly, pushing up aluminium cost. On the demand, the inventory growth after the holiday was better than expected, but high aluminum price suppressed downstream consumption, and the inventory of aluminum ingots and aluminum billets declined at a slower pace. In the short term, supply-demand imbalance is not prominent. Low inventory and bullish demand can support aluminum price. It is expected that the aluminum prices may go up.