Copper and Aluminum Rebound Momentum Weakens, Alumina Continues Strong Rally in Short Term [Institution Commentary]

[Futures Market] During the night session, SHFE copper futures hit a new short-term high before pulling back. The weakness persisted during the daytime session, with the futures hitting a new intraday low in the afternoon. The most-traded June futures contract closed at 77,870, down 0.80%. Total trading volume decreased, and total open interest fell by over 8,000 lots. SHFE aluminum futures remained strong for most of the day, benefiting from the rise in alumina prices, but pulled back at the end of the session. The most-traded July futures contract closed at 20,185, up 0.32%. Total trading volume decreased slightly, and total open interest increased slightly. Alumina futures hit a new recent high, with the most-traded September futures contract closing at 2,988, up 3.82%.

[Analysis] Today is the last trading day for the April futures contracts. The SHFE copper futures market weakened, with yesterday's gains fully erased by today's losses. Among the domestic M1, M2, and social financing data released after yesterday's session, although M2 was better than expected, M1 and social financing fell short of expectations. The gap between M2 and M1 widened, and overall domestic financial data for April was mediocre, necessitating further policy support in the future. In the short term, SHFE copper futures should monitor support at the 77,000 level. SHFE aluminum futures have recently benefited from the rebound in alumina prices, but the futures market weakened in the afternoon today, suggesting a need to be cautious about short-term adjustments.

[Valuation] Copper is moderately overvalued; aluminum is fairly valued.

[Risks] External risks

(Source: China Fortune Futures)