[SMM Cable Conference | SMM: China-US Tariff Easing, Fundamentals Supporting, Copper and Aluminum Prices Expected to Fluctuate Upward] Ye Jianhua, General Manager of SMM Industry Research, analyzed the copper and aluminum markets amidst the volatile macroeconomic environment. The increase in global copper mine output primarily comes from expansion projects. The rapid expansion of global copper smelter capacity makes it difficult to alleviate the tight raw material supply situation. Regarding the aluminum market: On the macro side, the easing of China-US tariffs with a 90-day window period has had a significant positive impact, potentially driving up overall aluminum prices in the future. On the fundamental side, the high operating rates of aluminum plants and the supplement of imported supplies have maintained stable domestic supply. The recent retreat in aluminum prices has stimulated downstream purchasing sentiment, and inventory depletion has provided support for aluminum prices. Coupled with the impact of increased demand for end-use products due to front-loading of exports during the subsequent China-US tariff window period, aluminum prices may fluctuate upward. Continuous attention should be paid to the impact of tariff events on consumption promotion and changes in domestic demand in the future.

[SMM Weekly Survey on Aluminum Downstream: Weekly Operating Rate of Aluminum Processing Continues to Decline by 0.2% to 61.4%, with Sector Differentiation and Notable Recovery in Export Trade] This week, the operating rate of leading enterprises in China's aluminum processing downstream sector declined slightly by 0.2 percentage points WoW to 61.4%, with the differentiation trend continuing across various sectors.

Overnight, LME copper opened at $9,463.5/mt, dipping to a low of $9,433.5/mt shortly after the opening bell. It then fluctuated upward, reaching a high of $9,519.5/mt near the close, ultimately closing at $9,519.5/mt, up 0.34%.

[SMM Aluminum Morning Meeting Summary: Aluminum Market Sees Mixed Bullish and Bearish Sentiments with Fluctuating Trends, Awaiting Inventory and Demand Validation] Overall, the current low inventory provides support for aluminum prices. However, there were no unexpectedly positive macroeconomic factors during the week to further drive up aluminum prices, and the pressure from the off-season on the demand side limits the upside room. Spot aluminum ingots in major consumption areas will face a situation of weak supply and demand. In the short term, aluminum prices are expected to maintain a rangebound and fluctuating trend, with attention to be paid to the performance of domestic and overseas demand, the inventory trend at the end of May, and the supply disruptions of bauxite.

[Weekly Review of Secondary Aluminum Market] The secondary aluminum alloy market stabilized this week. As of May 22, the SMM ADC12 price remained flat WoW, trading within the range of 20,300-20,500 yuan/mt.

After entering Q2, the scale of maintenance at domestic refineries further expanded, driving a continued decline in petroleum coke supply. However, as previously shipped cargoes arrived at ports, the inventory of petroleum coke at ports has entered a buildup cycle. Demand-side performance remained weak, with downstream enterprises lacking purchasing momentum. Coupled with the impact of Sino-US trade frictions, the buying sentiment of traders cooled significantly, and the market was dominated by a wait-and-see atmosphere. On the import front, considering shipping schedules and the concentrated arrival of previous orders, SMM expects that petroleum coke imports will continue to show a growth trend MoM in Q2. It is worth noting that, driven by previously announced policies, traders have accelerated the shipping pace of petroleum coke imported from the US to reduce tax costs, a factor that may further boost the MoM increase in import volumes.

Regarding aluminum billet inventory, according to SMM statistics, as of May 22, the aluminum billet inventory at major domestic consumption hubs stood at 1.308 million mt, a decrease of 7,400 mt from the previous Thursday, with inventory remaining firmly at a low level compared to the same period in the past three years. After falling below 1.5 million mt, aluminum billet inventory continued to decline, but the pace of destocking slowed somewhat this week. In terms of outflows from warehouses, domestic aluminum billet outflows totaled 49,500 mt during the period from May 12 to May 18, an increase of 2,900 mt from the previous week, yet still lower than the 52,400 mt recorded in the same period last year. This further confirms that the continuous decline in current aluminum billet inventory is significantly influenced by the supply side, while demand performance remains moderate. Against the backdrop of the consumption pattern transitioning from peak to off-season, aluminum billet producers, adhering to a produce-based-on-sales strategy, maintained low in-plant inventory. The market primarily engaged in transactions involving truck-transported goods, leading to a reduction in goods shipped to warehouses. The tightening of the supply side provided the impetus for the continuous destocking of aluminum billet inventory. However, from the perspective of this week's consumption, further declines in aluminum billet inventory have encountered significant resistance. Coupled with poor market trading sentiment and stable production rhythms at enterprises, aluminum billet inventory may exhibit a bottoming-out structure. SMM forecasts that aluminum billet inventory will oscillate within the range of 100,000-150,000 mt.