Core view: The contradiction between supply and demand is not outstanding, and the aluminum price is shaken

The main logic:

(1) The president of the Minneapolis Fed said that recent data showed that monetary policy may not be as tight as Fed officials thought, inflation may hover around 3 percent, and the most likely option for the Fed is to keep interest rates higher for longer, and if high inflation becomes stubborn, it will raise rates if needed. The dollar index closed up 0.26 per cent at 105.36.

(2) The LME intends to integrate the relevant requirements of the EU Carbon Border Adjustment Mechanism with the LME market rules, requiring all aluminum delivery brands (including primary aluminum and aluminum alloys) to provide verified product carbon emission data from March 2025.

(3) On May 7, aluminum futures warehouse receipt was 123,387 tons, 603 tons less than the previous day; LME aluminum inventory 486,050 tons, a decrease of 1700 tons per day.

(4) On May 7, the spot price of 05 contracts in East China reported a discount of 80 yuan/ton, with a daily discount of -20; Central Plains spot discount 190 yuan/ton, daily chain -40; South China discount 120 yuan/ton, daily chain +35.

(5) LME aluminum rose 0.69% to $2,568.5 / ton. Yesterday, the main contract of Shanghai aluminum fell 0.53 to 20635 yuan/ton; Overnight trading was volatile, closing down 0.24% at 20,585 yuan/ton. In terms of fundamentals, the Jinyu bauxite mine has not resumed production, and the tight supply of domestic ore has led to limited alumina production. At present, there is news in the market that some mines in Shanxi will enter the acceptance stage, and follow-up attention will be paid to the progress of mine resumption and alumina recovery. In terms of electrolytic aluminum production, the resumption of electrolytic aluminum production in Yunnan has been steadily promoted, and the production capacity has reached 680,000 tons up to now, and the remaining production capacity to be resumed is expected to continue to promote the resumption of production in May to June. In terms of imports, the domestic electrolytic aluminum import window is closed, and the import loss is narrowed to about 1,400 yuan/ton. On the demand side, the spot transaction after the holiday is relatively general, and the spot discount in East China expanded, but the inventory of aluminum ingots only accumulated 3,000 tons during the long holiday, which performed better than expected, and continued to form support for aluminum prices. Follow-up attention to macro trading narrative switch, ore supply recovery, Yunnan electrolytic aluminum production resumption and downstream consumption performance after the holiday.

Market research: aluminum price below the support reference 20400-20500.