2.13 SMM Morning Meeting Minutes
Futures:SHFE aluminum closed at 23,395 yuan/mt in the night session, down 0.91%, breaking below the short-term moving averages MA5 (23,544) and MA10 (23,522), with the moving average system showing a bearish alignment; the price is approaching the medium-term lifeline MA60 (23,069.42), which will become a key defensive level. The MACD indicator's DIF (-23.3329) accelerated its decline after crossing below the zero line, while DEA (117.8205) also pulled back, and the histogram's negative value expanded to -282.3068, indicating significantly strengthened bearish momentum. The core trading range for SHFE aluminum is suggested at 23,200-23,600. LME aluminum closed at $3,097.5/mt in the night session, down 0.63%, with the price fluctuating between MA5 (3,111.9) and MA10 (3,093.55); after the short-term moving averages converged, there are signs of turning downward. It remains below MA30 (3,133.22) and above MA60 (3,008.32), indicating a stable medium-term structure but a weakening short-term trend. The MACD indicator's DIF (9.0460) and DEA (21.5155) maintained a death cross, with the histogram's negative value at -24.9391, suggesting continued accumulation of bearish momentum. The core trading range for LME aluminum is suggested at 3,080-3,120.
Macro Front:Trump's tariff policy faces significant uncertainty. The US House of Representatives passed a resolution opposing President Trump's tariff hike on Canada. The resolution has been submitted to the Senate and is expected to pass. (Bullish ★) The US Treasury Secretary stated that his team met with Chinese officials in Beijing last week to prepare for upcoming high-level talks with the Vice Premier. Ministry of Commerce spokesperson He Yadong responded that China-US economic and trade teams maintain close communication at various levels through the economic and trade consultation mechanism. (Bullish ★) US stocks fell sharply as investors worried that artificial intelligence could erode future profits of some companies, triggering a broad decline in risk assets. (Bearish ★)
Fundamentals:Supply side, domestically, domestic and Indonesian aluminum projects are steadily ramping up production, but affected by fewer natural days in February, overall February production dropped MoM from January. Domestically, with the Chinese New Year approaching, downstream demand for raw materials marginally weakened. Coupled with the impact of high aluminum prices suppressing demand, downstream demand marginally weakened, and enterprises' willingness for casting ingot significantly strengthened, leading to a lower proportion of liquid aluminum in February. Although warehouse withdrawals of aluminum ingot in major consumption areas increased YoY this week, the social inventory buildup trend continued, with Thursday's inventory up 35,000 mt from Monday, and inventory pressure gradually increasing; the post-Chinese New Year holiday social inventory peak is expected to hit a new high in nearly three years.
Primary Aluminum Market:In the early session, SHFE aluminum 2602 fluctuated upward, with the price center higher than the previous trading day. Affected by the approaching Chinese New Year, overall market sentiment was weak, with mainstream transactions concentrated at the average price to a premium of 10 yuan/mt. Yesterday, the shipment sentiment index in the east China market was 2.21, down 0.08 MoM; the purchasing sentiment index was 2.33, up 0.04 MoM. SMM A00 aluminum closed at 23,350 yuan/mt, up 90 yuan/mt from the previous trading day, at a discount of 160 yuan/mt against the 2602 contract, up 30 yuan/mt from the previous trading day; at a discount of 220 yuan/mt against the 2603 contract. The central China market maintained sluggish transactions yesterday. As the Chinese New Year approached, pre-holiday stockpiling by downstream processing enterprises had basically ended, with only minimal just-in-time procurement. Major suppliers also gradually entered the Chinese New Year holiday, resulting in limited circulating supply. However, some traders engaged in buying the dip and stockpiling, driving transaction prices higher. Ultimately, actual transaction prices in the central China market ranged from a premium of 20 yuan to a premium of 60 yuan against the central China price. Yesterday, the shipment sentiment index in the central China market was 2.43, down 0.14 MoM; the purchasing sentiment index was 2.09, down 0.05 MoM. SMM central China closed at 23,260 yuan/mt, up 100 yuan/mt from the previous trading day, at a discount of 250 yuan/mt against the 2602 contract, up 40 yuan/mt from the previous trading day; at a discount of 310 yuan/mt against the 2603 contract. The Henan-Shanghai price spread was -90 yuan/mt, narrowing by 10 yuan/mt from the previous trading day.
Secondary Aluminum Raw Materials:Yesterday, spot primary aluminum prices edged down slightly compared to the previous trading day, with SMM A00 spot closing at 23,350 yuan/mt, while aluminum scrap prices overall held steady. Yesterday, baled UBC was quoted in a range of 16,850-17,300 yuan/mt (tax excluded), and shredded aluminum tense scrap (priced based on aluminum content) was quoted in a range of 19,000-19,700 yuan/mt (tax excluded). In terms of the price difference between primary aluminum and scrap, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was 3,543 yuan/mt on February 12, while the price difference between A00 aluminum and shredded aluminum tense scrap was 2,736 yuan/mt. High aluminum prices suppressed downstream demand, leading to low stockpiling willingness among downstream aluminum processing enterprises, with stockpiling volumes significantly lower than in previous years. Additionally, the Chinese New Year holiday period was longer compared to 2025. This week, both aluminum scrap yards and scrap utilization enterprises gradually entered the Chinese New Year holiday, with yard shipment activities suspended. Only a small amount of delayed arrivals were slightly warehoused, and market trading tended to be sluggish. Post-Chinese New Year, aluminum scrap prices are expected to hover at highs, as downstream demand is unlikely to recover quickly. The mainstream range for shredded aluminum tense scrap (priced based on aluminum content) is still expected to fluctuate around 19,000-19,800 yuan/mt (tax excluded). Aluminum scrap yards and some scrap utilization enterprises have not yet ended their holidays, constraining the recycling of new scrap. Supply release remains tight, coupled with high aluminum prices, providing bottom support for aluminum scrap prices. However, downstream demand declined MoM compared to January, and transactions are expected to remain sluggish, primarily consisting of just-in-time restocking. In the short term, the supply-demand standoff with weak both sides is likely to persist. Close attention should be paid to the pace of work resumption at downstream processing enterprises after the holiday, and caution is warranted as post-holiday resumption expectations may reignite market capital sentiment, thereby pushing up aluminum prices and keeping trading activity in the aluminum scrap market sluggish.
Secondary Aluminum Alloy: Futures side, the most-traded aluminum alloy 2604 contract opened at 22,195 yuan/mt, quickly dipped to around 22,085 yuan/mt after opening, then fluctuated and rebounded, hitting an intraday high of 22,295 yuan/mt before noon. In the afternoon, it consolidated narrowly in the range of 22,200–22,280 yuan/mt, and finally closed at 22,260 yuan/mt, up 55 yuan/mt or 0.25% from the previous close. Trading volume was 9,009 lots, and open interest fell by 1,588 lots to 12,761 lots, mainly due to short covering. Spot market side, the A00 aluminum price rose 90 yuan/mt from the previous trading day to 23,350 yuan/mt, while the SMM ADC12 price held steady at 23,650 yuan/mt. Currently, upstream and downstream enterprises have gradually entered the Chinese New Year holiday period. Most small and medium-sized secondary aluminum plants have shut down furnaces for the holiday, and large enterprises also began arranging holidays starting today. Market shipments have basically halted. Against the backdrop of synchronized cooling on both supply and demand sides, spot quotations and actual transactions have noticeably weakened, and the market as a whole has entered a pre-holiday lull. Prices are expected to remain stable with limited fluctuation room before the holiday.
Aluminum Market Summary: The US House of Representatives opposed Trump's tariff hike on Canada, and high-level economic and trade contacts between China and the US signaled eased relations, leading to a temporary cooling of trade friction risks, which boosted market sentiment. However, overnight declines in gold and silver prices, combined with a sharp drop in US stocks fueled by AI concerns, put pressure on risk assets, partially offsetting the macro-positive impact on aluminum prices. Seasonal weakening pressure on fundamentals became more pronounced. On the supply side, new aluminum projects domestically and overseas steadily ramped up production. On the demand side, as the Chinese New Year holiday approached, downstream processing enterprises successively halted production for the holiday, compounded by the dampening effect of high aluminum prices, leading to a significant weakening in raw material procurement demand. Enterprises' willingness to cast ingots increased substantially, the proportion of liquid aluminum declined accordingly, and the pace of inventory buildup expanded MoM. The market widely expects post-holiday inventory peaks to hit a three-year high, with visible inventory increasingly weighing on aluminum prices. Overall, bullish sentiment in the nonferrous metals market cooled, and coupled with high inventory pressure, aluminum prices were in the doldrums this week. During the Chinese New Year holiday, domestic markets are closed while overseas markets continue trading. Caution is warranted against volatility in macro and overseas markets during the holiday potentially causing post-holiday fluctuations in aluminum prices.
[The information provided is for reference only. This article does not constitute direct investment research advice. Clients should make decisions cautiously and not use this to replace independent judgment. Any decisions made by clients are unrelated to SMM.]
![Some enterprises are on holiday for the New Year, and overall trading sentiment has further weakened. [SMM Spot Aluminum Midday Review]](https://imgqn.smm.cn/usercenter/ceevU20251217171653.jpg)
