China-U.S. Economic and Trade Negotiations Concluded, Macro Sentiment Rebounds Triggering Copper and Aluminum Rebound [Institutional Commentary]

[Futures Market] During the night session, SHFE copper moved downwards after a higher opening. It surged at the opening this morning and then fluctuated, before strengthening in the afternoon. The most-traded June futures contract closed at 78,260, up 0.77%. Both the total trading volume and open interest increased slightly. The trading rhythm of SHFE aluminum was basically synchronized with that of SHFE copper. The most-traded June futures contract closed at 19,910, up 1.66%. The total trading volume increased significantly, while the total open interest decreased by more than 20,000 lots. Meanwhile, the most-traded September alumina futures contract closed at 2,843, up 0.67%.

[Analysis] Before the opening this morning, news reported that important consensus had been reached at the high-level economic and trade talks between China and the US, boosting the overall prices of non-ferrous metals, including copper and aluminum. At 15:00 after the market closed, the joint statement of the China-US Geneva Economic and Trade Talks was released. The overall macro sentiment in the market improved, with copper and aluminum poised for a rebound. In the short term, attention should be paid to the coordination between volume and price, and trading should turn active.

[Valuation] Copper is slightly overvalued, while aluminum is fairly valued.

[Risk] External risks

(Source: China Fortune Futures)