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Weak Rebound, Temporary Stabilization

Viewpoint: Macro guidance is temporarily paused, with mixed trends in non-ferrous metals. Funds are holding cash and waiting. Industrial output and electricity investment in May both maintained growth, but the impact on the market is limited, with doubts about the sustainability of this growth among funds. Mid-term macro weakness sentiment persists. On the supply side, domestic bauxite supply remains tight, prompting some provinces to accelerate the exploration and development of new bauxite mines. The strong reality remains unchanged. On the demand side, rain and high temperatures reduce the rate of infrastructure starts, causing aluminum prices to fall and limited downstream stocking. The night session rebound below the 60-day moving average remains weak, with continued low trading volume and volatility. There may be a potential increase in volume in the future, focusing on fund guidance. The market is expected to weakly consolidate between 20,000-21,000.

On June 19, aluminum inventory on the Shanghai Futures Exchange decreased by 5,711 tons to 170,047 tons. LME aluminum inventory decreased by 2,100 tons to 1,066,575 tons. Spot A00 aluminum is quoted at 20,400, up 50, with a discount of 25 to the Shanghai aluminum 07 contract.

Technical Analysis: The 07 contract opened flat in the Wednesday night session, narrowly fluctuating between 20,450-20,545 and closing at 20,495, with a decrease of 2,064 contracts and reduced trading volume. The weighted contract opened flat, narrowly fluctuating between 20,495-20,594 and closing near the 60-day moving average at 20,545. The MACD green bar temporarily shortened, with reduced downward momentum and further decreased fund participation. Today, attention will be on further fund movements. In the short term, the market is expected to weakly consolidate between 20,000-21,000.

According to a report from June 19 by foreign media, the latest report from the World Bureau of Metal Statistics (WBMS) shows that in April 2024, there was a global primary aluminum supply shortage of 139,600 tons. From January to April, the global primary aluminum supply shortage was 76,900 tons.

At a press conference held by the Guizhou Provincial Department of Natural Resources, it was announced that since 2022, the province has been advancing a new round of the mineral exploration breakthrough strategy. Significant results have been achieved in the exploration of advantageous mineral resources: a completely concealed large bauxite ore body has been delineated in the central Guizhou region, with more than 50 million tons of bauxite discovered, marking a major breakthrough in bauxite exploration in the central Guizhou region in nearly 30 years.

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