Copper Hits New Highs, SHFE Aluminum Rebounds Amid Alumina Drag [Institutional Comments]

【Futures Market】During the night session, SHFE copper opened higher and fluctuated rangebound. It quickly rose at the opening of the early session, setting a new high for this round, then entered a phase of fluctuating upward until the close. The most-traded May contract closed at 81,670, up 1.26%. Total volume increased, with open interest rising by over 13,000 lots to nearly 600,000 lots, reaching a new high since late May last year. Meanwhile, SHFE aluminum, no longer weighed down by alumina, followed a similar trend to SHFE copper on the day. The most-traded May contract closed at 20,895, up 1.11%, with total volume increasing and open interest rising by over 12,000 lots. Alumina set another low for this round, with the most-traded May contract breaking below the 3,000 mark to 2,991, down 1.55%.

【Analysis】Amid a weak US dollar, copper is in a strong position due to expectations of supply contraction and potential demand growth. After the Chinese New Year holiday, total open interest in SHFE copper increased from 390,000 lots to nearly 600,000 lots, a rise of over 50%, indicating high market activity. In the later period, attention will be on whether copper smelters cut production or undergo maintenance during the negative TCs phase. Today, SHFE aluminum was influenced by SHFE copper, temporarily escaping the drag from falling alumina. In the later period, focus will be on inventory reduction during the peak consumption season for aluminum. Maintain a positive outlook for copper, while waiting for alumina to stabilize for aluminum.

【Valuation】Neutral

【Risk】Macro policies fall short of expectations

(Source: China Fortune Futures)