SMM Aluminum Market Morning Comment (May 21)

The most-traded SHFE 2407 aluminum contract opened at 20,890 yuan/mt overnight, with its high and low at 21,075 yuan/mt and 20,855 yuan/mt before closing at 21,040 yuan/mt, up 95 yuan/mt or 0.45%. LME aluminum opened at $2,621/mt in the previous trading day, with its low and high at $2,605/mt and $2,648/mt respectively before closing at $2,626.5/mt, up $5.5/mt or 0.21%.

Summary: On the macro front, the Fed's willingness to cut interest rates wavered again, domestic economic data improved, expectations for a real estate recovery strengthened, and the government is determined to boost demand. The domestic aluminum operating capacity continued to grow. Around 660,000 mt of aluminium capacity in Yunnan has been resumed, and the remaining 630,000 mt are expected to be restarted and then reach full capacity in June. The consumption is transitioning to the off-season, together with high aluminum prices inhibiting downstream purchasing willingness, resulting in the social inventory of aluminum ingots increasing from a week ago and the same period last year. In the short term, the macro fundamentals will be intertwined with bullish and bearish factors, and aluminum prices are expected to move rangebound.