China-US Economic and Trade Negotiations Concluded, Macro Sentiment Rebound Expected to Help Aluminum Prices Rebound [SMM Aluminum Futures Brief Comment]

》Check SMM aluminum product quotes, data, and market analysis

SMM, May 12:

Today, the most-traded SHFE aluminum 2506 contract opened at 19,695 yuan/mt, with a high of 19,920 yuan/mt, a low of 19,695 yuan/mt, and closed at 19,910 yuan/mt, up 1.30%. Trading volume was 133,000 lots, and open interest was 168,000 lots.

SMM Comment: On the macro side, it still takes time for the transmission of domestic favorable policies, while positive progress has been made in the Sino-US tariff game, which may drive the futures market to stand firm on quotes. On the fundamental side, the de-stocking of domestic aluminum ingot inventory provides support for aluminum prices. As of May 12, the social inventory of aluminum ingot in China's regions was 601,000 mt, a decrease of 19,000 mt from May 8. With the conclusion of the Sino-US economic and trade negotiations during the day, macro sentiment has warmed up, easing concerns about economic growth and demand. Aluminum prices are expected to break through the 20,000 yuan/mt mark, and it is anticipated that domestic aluminum prices will fluctuate considerably in the short term.

Today, the most-traded alumina 2509 contract opened at 2,816 yuan/mt, with a high of 2,856 yuan/mt, a low of 2,785 yuan/mt, and closed at 2,843 yuan/mt, up 1.17%. Trading volume was 476,000 lots, and open interest was 273,000 lots.

SMM Comment: Last week, there were both increases and decreases in the operating capacity of alumina enterprises, with the total operating capacity slightly decreasing by 80,000 mt/year. It is expected that some alumina enterprises will conduct maintenance in the following period, while new alumina capacity is expected to continue to be commissioned and released. In the short term, the operating capacity of alumina may fluctuate. Recently, downstream feedback indicates that spot cargo supplies are tight in some regional markets. Under the circumstance that suppliers stand firm on quotes, spot prices may rebound slightly. However, on the cost side, bauxite prices have fallen significantly compared with the previous period, and the cost support has weakened. Overall, bullish and bearish factors are intertwined in the alumina market, and prices are expected to fluctuate in the short term.

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