[Futures Market] During the night session, SHFE copper opened lower and closed higher. In the day session, it hit a new high in the afternoon. The most-traded June futures contract closed at 78,940, up 1.36%, with a significant increase in total trading volume and open interest approaching 20,000 lots. The trading rhythm of SHFE aluminum was largely synchronized with that of SHFE copper. The most-traded July futures contract closed at 20,240, up 1.40%, with a significant increase in total trading volume and a slight decrease in open interest. Meanwhile, the most-traded September alumina futures contract closed at 2,945, up 3.77%, with a notable increase in total trading volume and open interest exceeding 30,000 lots.
[Analysis] Recently, domestic inventory has continued to decline, leading to a gradual deepening of the backwardation structure in domestic futures contracts. Today, SHFE copper has fully filled the gap created by the sharp drop on April 7. Against the backdrop of increased open interest and trading volume, the market has entered a strong phase. After experiencing a correction last week, SHFE aluminum has regained strength. The continuous decline in domestic and overseas market inventory has boosted the market. Meanwhile, the expectation of a contraction in upstream alumina supply has strengthened, leading to a sharp rebound. Currently, the macro environment is improving, coupled with the continuous decline in copper and aluminum inventory, the rebound may continue to rise.
[Valuation] Copper is moderately overvalued, while aluminum is fairly valued.
[Risks] External risks
(Source: China Fortune Futures)
