The Chinese domestic aluminum market has recently experienced significant fluctuations due to a mix of influential factors. Despite the off-season's dampening effect and a conservative approach from bullish investors, market analysts anticipate a rebound in aluminum prices in the short term.

A key factor influencing this shift is the notable expansion of production cuts in Yunnan. Recent data reveals that Yunnan has already reduced its production capacity by approximately 81 tons, with plans to cut an additional 300,000 tons. This significant reduction is expected to drive up aluminum premiums and discounts, providing a boost to aluminum prices.

Moreover, a slight decrease in inventories last week has added to the bottom support for aluminum prices, indicating a tighter supply scenario in the market.

The domestic economic landscape also plays a pivotal role. The Chinese government's recent macroeconomic policies, focusing on regulating the real estate sector, averting financial risks, and stimulating economic growth, have instilled a renewed sense of confidence in the market. These measures are believed to positively impact aluminum prices, especially in the short term.

Despite the lukewarm transaction performance and the market's cautious stance due to high prices, the combination of Yunnan's production cuts and proactive domestic policies is tilting the balance in favor of a bullish outlook for aluminum prices.

Investors are advised to closely monitor market developments and seize emerging investment opportunities in this dynamic environment. The interplay of these diverse factors suggests that the aluminum market in China is gearing up for a notable upswing in the near future.