[Overnight, LME Aluminum and SHFE Aluminum Edged Up Slightly, but Aluminum Prices Faced Short-Term Pressure at High Levels] Continued destocking in LME inventory provided bottom support for LME aluminum, but amid tightening fund liquidity and profit-taking by bulls, upward momentum remained insufficient, and the backwardation structure weakened somewhat. China’s social inventory rose to a high for the same period in nearly five years, and the inventory buildup cycle had yet to end, with high inventory and weak spot fundamentals jointly weighing on upward momentum. The divergence between domestic and overseas drivers continued, the SHFE/LME price ratio kept weakening, and prices were mainly under pressure in the short term.

[Macro Pressures Combined With High Inventory, SHFE Aluminum Remained Under Pressure at Elevated Levels in the Short Term] Continued destocking in LME inventory provided bottom support for LME aluminum, but amid tightening fund liquidity and profit-taking by bulls, upward momentum was insufficient, and the backwardation structure weakened somewhat. In China, social inventory rose to a high for the same period in nearly five years, and the inventory buildup cycle had not ended. High inventory and weak spot fundamentals jointly weighed on upward momentum. The divergence between domestic and overseas drivers continued, the SHFE/LME price ratio kept weakening, and SHFE aluminum fell below the key threshold of 25,000 yuan/mt, remaining mainly under pressure at elevated levels in the short term.

[SMM Morning Aluminum Meeting Summary: Macro Uncertainties Remain, Low Inventory Supports Aluminum Price Range] Overall, the current low inventory provides support for aluminum prices. However, in the near term, there have been no unexpected macroeconomic positives to further drive aluminum prices higher, and the off-season pressure on the demand side limits upside room. In the short term, aluminum prices are expected to maintain a rangebound, fluctuating trend. Attention should be paid to the performance of domestic and overseas demand, the inventory trend at the end of May, and the supply disruptions of bauxite.

Futures Market: On last Friday's night session, the most-traded SHFE aluminum 2507 contract opened at 20,125 yuan/mt, with a high of 20,175 yuan/mt, a low of 20,080 yuan/mt, and closed at 20,175 yuan/mt, up 20 yuan/mt or 0.10% from the previous close.

[SMM Morning Comment on Alumina: Fundamentals Show Mixed Signals, Alumina Expected to Fluctuate] Overall, supply side, some alumina refineries in northern regions reported maintenance this week, which may slightly impact alumina supply in the short term. Weekly operating rates of alumina dropped slightly by 0.33 percentage points this week. Demand side, some aluminum production cuts and technological transformation capacities in Sichuan and other regions may gradually resume production, leading to an increase in alumina demand. Cost side, due to the sharp decline in spot alumina prices, alumina refineries have significantly reduced their acceptance of high-priced bauxite, and bauxite holders have also lowered their quotations. Imported bauxite prices fell, potentially reducing alumina production costs. However, the current spot transaction prices of alumina in northern regions are below the theoretical marginal production cost. Overall, large-scale production cuts in alumina have not yet occurred, and the spot alumina market remains relatively well-supplied. Spot transaction prices are expected to fluctuate in the short term.

[SMM Morning Comment on Alumina: Fundamentals Mixed, Alumina Expected to Fluctuate] Overall, supply side, some alumina refineries in northern regions reported maintenance this week, which may slightly impact alumina supply in the short term. Weekly operating rate of alumina decreased slightly by 0.33 percentage points this week. Demand side, some aluminum production cuts and technological transformation capacities in Sichuan and other regions may gradually resume production, leading to an increase in alumina demand. Cost side, due to the sharp decline in spot alumina prices, alumina refineries have significantly reduced their acceptance of high-priced bauxite. Bauxite holders also lowered their quotations, and imported bauxite prices fell, potentially reducing alumina production costs. However, the current spot transaction prices of alumina in northern regions are below the theoretical marginal production cost. Overall, large-scale alumina production cuts have not yet occurred, and the spot alumina market remains relatively well-supplied. Spot transaction prices are expected to fluctuate in the short term.