Copper and Aluminum Return to Strong Zone, Alumina Rises Nearly 100 Points to Hit New Stage High [Institution Commentary]

[Futures Market] During the night session, SHFE copper opened higher and continued to rise, hitting a new intraday high in the morning session and maintaining its strength in the afternoon. The most-traded June contract closed at 78,100, up 0.31%, with a slight increase in total trading volume and open interest rising by over 3,000 lots. SHFE aluminum, benefiting from the dual drivers of SHFE copper and alumina, showed strength throughout the day. The most-traded July contract closed at 20,190, up 0.65%, with slight increases in both total trading volume and open interest. Alumina surged significantly during the day session, hitting a new stage high. The most-traded September contract closed at 3,246, up over 3%, with open interest increasing by more than 18,000 lots to over 490,000 lots.

[Analysis] The overnight weakness of the US dollar drove a broad rebound in non-ferrous metals. Due to contract rolling, SHFE copper futures contracts with longer maturities outperformed the most-traded June contract today. SHFE copper has returned to a strong zone in the short term. Attention should be paid to the expansion of open interest in longer-maturity contracts in the future. If the overall expansion of open interest continues, the rebound may have further upside potential. For alumina, the focus remains on the supply of bauxite from Guinea. In the short term, prices are expected to maintain high upward elasticity, driving up SHFE aluminum prices. Attention should be paid to the situation in Guinea in the short term. Currently, aluminum is gradually entering the off-season for consumption, and in the medium term, attention should be paid to the price feedback of aluminum on alumina.

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

[Risks] External risks

(Source: China Fortune Futures)