US dollar falls again, SHFE aluminum fluctuates upward [SMM Aluminum Futures Brief Comment]

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

SMM May 21 Report:

Today, the most-traded SHFE aluminum 2507 contract opened at 20,135 yuan/mt, with a high of 20,220 yuan/mt, a low of 20,120 yuan/mt, and closed at 20,190 yuan/mt, up 0.65%. Trading volume was 117,000 lots, and open interest was 200,000 lots.

SMM Commentary: On the macro front, dragged down by the US Fed's cautious stance on the economy, the US dollar fell again on Tuesday. Domestically, signals of monetary policy easing were released, improving market expectations and stimulating economic growth and investment and consumption demand. On the fundamentals side, there were relatively small changes in the short-term supply side. On the cost side, the specific impact of the Guinea incident on local bauxite supply remains to be assessed, and it may provide short-term sentiment-based cost support for alumina. The demand side is facing dual pressures from domestic seasonal weakness and trade uncertainties, making significant short-term growth difficult. Overall, positive macro factors and low inventory provide support for aluminum prices, but the off-season pressure on the demand side limits upside room. In the short term, attention should be paid to domestic and overseas demand performance as well as bauxite supply conditions.

Today, the most-traded alumina 2509 contract opened at 3,130 yuan/mt, with a high of 3,274 yuan/mt, a low of 3,079 yuan/mt, and closed at 3,246 yuan/mt, up 3.11%. Trading volume was 2.483 million lots, and open interest was 357,000 lots.

SMM Commentary: Last week, maintenance and production cuts were concentrated among alumina refineries in south China, with operating capacity decreasing by 2.9 million mt/year WoW, further tightening spot supply. Additionally, alumina refineries have been facing losses in recent months, with a strong intention to refuse to budge on prices. Coupled with maintenance and production cuts, spot supply tightened, leading to a significant rebound in spot prices. Last Friday, due to the revocation of mining rights for some companies in Guinea, some currently operating companies received notices of suspension. This week, some miners declared force majeure to shipping companies. The specific impact of this incident on Guinea's bauxite supply remains to be assessed, and it may provide short-term sentiment-based support for bauxite prices, thereby supporting the cost side of alumina. Subsequent attention should be paid to changes in the operating capacity of alumina refineries, as well as shipments of Guinea bauxite from the raw material side and the dynamics of related companies.

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