[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.

[SMM Morning Comment on Alumina: Mine Quotations Lowered, Alumina May Continue to Decline] Overall, supply side, some alumina refineries in northern regions reported maintenance this week, which may slightly impact alumina supply in the short term. The 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. Quotations from bauxite holders have also decreased, and imported bauxite prices have fallen. Alumina production costs may decline accordingly. 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. The spot alumina market remains relatively well-supplied, and the downward trend in spot transaction prices persists, with short-term prices likely to continue declining.

[SMM SHFE Aluminum Brief Review: US Dollar Index Rose in the Short Term, SHFE Aluminum Fluctuated Upward Today] On the macro front, after the release of January CPI data, which exceeded expectations across the board last night, the US dollar index rose in the short term but ultimately closed up by 0.05% at 107.98, as Trump is expected to sign a reciprocal tariff executive order. With the EU intensifying sanctions and US tariff pressure, the global aluminum market is likely to undergo structural adjustments in the short term due to policy impacts. Continuous attention is needed on the trends of US and EU trade policies and changes in demand from major consumer markets.

SMM Morning Comment on Alumina: Overall, in the short term, alumina operating capacity is expected to continue increasing, and the spot market for alumina remains relatively loose compared to earlier periods. Domestic alumina prices continue to decline, while overseas spot alumina transaction prices have stabilized. Model calculations show that imported alumina losses exceed 1,000 yuan, and the domestic alumina export window may gradually open. In the short term, there are no clear expectations for production cuts in alumina, and supply remains unchanged. Some aluminum production cuts or technological transformation capacities in south-west China may gradually resume production, with demand rebounding slightly. However, this is unlikely to reverse the relatively loose supply pattern in the spot alumina market. Moving forward, attention should be paid to domestic alumina exports, bauxite prices, and supply conditions.

SMM Morning Comment on Alumina: Overall, in the short term, alumina operating capacity is expected to continue increasing, and the spot market for alumina remains relatively loose compared to earlier periods. Domestic alumina prices continue to decline, while overseas spot alumina transaction prices have stabilized. Model calculations show that imported alumina losses exceed 1,000 yuan, and the domestic alumina export window may gradually open. In the short term, there are no clear expectations for production cuts in alumina, and supply remains unchanged. Some aluminum production cuts or technological transformation capacities in south-west China may gradually resume production, with demand rebounding slightly. However, this is unlikely to reverse the relatively loose supply pattern in the spot alumina market. Moving forward, attention should be paid to domestic alumina exports, bauxite prices, and supply conditions.