SMM Aluminum Market Morning Comment (June 7)

Overnight, the most-traded SHFE 2407 aluminum contract opened at 21,265 yuan/mt, reaching a high of 21,380 yuan/mt and a low of 21,230 yuan/mt, and closed at 21,375 yuan/mt, up 150 yuan/mt, an increase of 0.71%. On the previous trading day, LME aluminum opened at $2,633.5/mt, reached a high of $2,673/mt and a low of $2,628.5/mt, and closed at $2,647.5/mt, up $12.5/mt, an increase of 0.47%.

On the macro front, the European Central Bank's recent decision to cut interest rates has sparked hopes that the US Fed might follow suit. Weaker-than-expected US employment data has fueled hopes for a rate cut by the Fed later this year, shifting market focus to the non-farm payrolls data to be released on Friday. On the fundamentals, domestic aluminium operating capacity has entered a stable transition period, with capacity awaiting resumption mainly concentrated in Yunnan, Sichuan, and Guizhou, leading to a slowdown in production growth. On the downstream demand, the market is relatively weak, with new orders in the industry remaining sluggish, although some sectors still show resilience in demand. In the short term, the fundamentals indicate a marginal weakening of the supply-demand relationship, and domestic aluminum prices are expected to move rangebound next week.