SMM Aluminum Market Morning Comment (May 22)

The most-traded SHFE aluminum contract 2407 opened at 21,350 yuan/mt overnight, reaching a high of 21,620 yuan/mt and a low of 21,225 yuan/mt, and closed at 21,370 yuan/mt, up 275 yuan/mt or 1.3%. The previous trading day, LME aluminum opened at $2,628/mt, hit a high of $2,765.5/mt and a low of $2,607/mt, and closed at $2,715.5/mt, up $89/mt or 3.39%.

Summary: On the macro front, a rate cut in Europe may be on the horizon, domestic economic data improved, expectations for a real estate recovery strengthened, and the government is determined to boost demand. On the fundamentals, domestic aluminum operating capacity increased, consumption is transitioning to the off-season, and high aluminum prices inhibited downstream purchasing willingness. Aluminum ingot social inventory grew compared to the same period last year. On the cost side, alumina prices recently surged, driving aluminum prices to spike and then fall overnight. In the short term, the macro fundamentals will be intertwined with bullish and bearish factors, and aluminum prices are expected to continue to fluctuate widely.