4.9 SMM Morning Meeting Minutes
Futures:SHFE aluminum closed at 24,670 yuan/mt in last night's night session, down slightly by 0.06%. Prices moved sideways around MA5 (24,692), slightly below this moving average but above MA10 (24,538), MA30 (24,538.5), and MA60 (24,351.33), with short-term moving average resistance coexisting with medium-term moving average support. The MACD indicator DIF (98.37) and DEA (64.98) maintained a golden cross above the zero axis, with the histogram expanding to 66.78, indicating recovering bullish momentum. The suggested core trading range for SHFE aluminum is 24,400-24,900. LME aluminum closed at $3,455.5/mt, down 0.56%. Prices pulled back below MA5 (3,478.8) but remained well above medium and long-term moving averages such as MA10 (3,405.6). The bullish alignment pattern remained intact, representing a normal pullback within an uptrend. The MACD indicator DIF (59.7) and DEA (50.37) maintained an upward golden cross, with the histogram narrowing to 18.66, indicating weakening upward momentum. The suggested core trading range for LME aluminum is 3,420-3,500.
Macro Front:After the US-Iran ceasefire announcement, most of the over a thousand vessels stranded in the Strait of Hormuz were still "waiting and watching," with only a very few passing through. Iran required all vessels to obtain permission before transiting the strait. US President Trump stated that the US was considering "joint management" of the Strait of Hormuz with Iran. Oman said it had signed an agreement not to charge vessels transiting the Strait of Hormuz.
Fundamentals:Supply side, the Middle East conflict impacted core capacity, and the proportion of liquid aluminum in China rebounded significantly. Ex-China supply was directly hit by geopolitical conflicts, with Middle Eastern aluminum enterprises cutting production. Recently, UAE's EGA and Bahrain's Alba were successively struck by missile attacks, with production facilities damaged. The extent of damage was still under comprehensive assessment. The market widely expected large-scale production cuts or even shutdowns, with expectations of a widening global aluminum supply gap and continued escalation of ex-China supply concerns. In China, the proportion of liquid aluminum rose in March as downstream enterprises fully resumed work after the holiday, up significantly by 9.3 percentage points MoM to 73.7%, higher than early-month expectations. Entering the traditional peak consumption season in April, downstream operating rates continued to rise, and the proportion of liquid aluminum is expected to climb further. Inventory side, high aluminum prices in China suppressed downstream willingness to actively restock. Downstream enterprises generally purchased as needed based on orders and maintained low inventory operations, with no large-scale stockpiling behavior for now. On Thursday, China's aluminum ingot social inventory saw an inventory buildup of 11,000 mt from Tuesday, with short-term inventory still at a relatively ample level. Inventories outside China continued to decline, with LME aluminum inventory maintaining a downward trend this week, having fallen to 414,000 mt.
Primary aluminum market: In the morning session, SHFE aluminum 2604 fluctuated upward, with the price center moving higher than the previous day. Overall market shipments were low, available cargoes were relatively tight, and premiums continued to narrow. Transactions mainly concentrated at SMM A00 aluminum premiums of 20-30 yuan/mt. After the opening yesterday, aluminum prices rose. Traders who quoted high before the session tended to purchase at lower prices, but major holders held prices firm, leading to significant price divergence. Under high aluminum prices, downstream processing enterprises adopted a strong wait-and-see stance, with low purchase willingness, and overall market transaction sentiment was sluggish. Ultimately, actual transaction prices in the central China market concentrated in the range of central China price plus a premium of 20 yuan to central China price minus a discount of 10 yuan.
Aluminum scrap: Yesterday, spot primary aluminum rebounded by 80 yuan/mt from the previous trading day, while the aluminum scrap market showed mixed changes. Yesterday, the tightening regulatory stance on the "reverse invoicing" policy remained unchanged, with compliance costs in the aluminum scrap recycling process staying elevated, and actually available invoiced cargoes remaining tight. Demand side, the divergence in shipments between aluminum tense scrap and wrought aluminum alloy scrap intensified. For aluminum tense scrap-based materials such as shredded aluminum tense scrap and ADC12 aluminum shavings, downstream scrap utilization enterprises such as secondary alloy producers mostly maintained purchasing as needed with low inventory operations. For wrought aluminum alloy scrap-based materials such as baled UBC and 5-series/3-series plate off-cuts, downstream secondary aluminum plate/sheet and strip enterprises were in peak production season with relatively high stockpiling enthusiasm. However, overall, high prices combined with wild swings in aluminum prices continued to suppress the procurement enthusiasm of scrap utilization enterprises. Regarding the price spread, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was recorded at 3,078 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap was 1,788 yuan/mt. The aluminum scrap market is expected to hover at highs and fluctuate upward this week, with the mainstream price range of shredded aluminum tense scrap (priced based on aluminum content) operating around 20,800-21,300 yuan/mt (tax-exclusive). Supply side, regulatory policies such as "reverse invoicing" are unlikely to see substantial relaxation in the short term, and tight compliant supply combined with continued sentiment of holding back cargoes will continue to provide price floor support. Demand side, the peak season recovery fell short of expectations, with insufficient momentum in end-user order recovery, and the pattern of just-in-time procurement as the dominant mode is expected to continue. In the short term, close attention should be paid to the actual impact of Middle East geopolitical conflicts on global aluminum smelter capacity, downstream end-user order conditions, and the progress of reverse invoicing policy implementation, with vigilance against the risk of wild swings at high aluminum price levels.
Secondary aluminum alloy: Yesterday, ADC12 market quotations remained largely stable, with enterprises generally maintaining a wait-and-see attitude. On one hand, aluminum price fluctuations were limited, providing weak guidance on the cost side; on the other hand, downstream demand showed mediocre performance, and market transactions continued at a purchasing-as-needed pace. In the absence of clear bullish or bearish drivers, enterprises generally showed low willingness to adjust prices, and ADC12 prices are expected to continue to move sideways in the short term.
Aluminum Market Summary:Macro front, although the US and Iran reached a temporary ceasefire agreement, the Strait of Hormuz has not resumed normal passage. Vessels still require Iranian permission to navigate, with most ships remaining in a wait-and-see mode. Moreover, the geopolitical conflict carries the risk of spreading to surrounding areas, further intensifying market concerns over supply chain uncertainties in the Middle East. Supply side, the substantive damage previously inflicted is irreversible. Aluminum capacity in the Middle East suffered direct military strikes, with UAE's EGA and Bahrain's Alba successively attacked and production facilities damaged. The global aluminum supply gap expectations expanded significantly, and ex-China supply concerns continued to escalate. Meanwhile, China entered the traditional peak consumption season, with the proportion of liquid aluminum rebounding sharply to 73.7%. Downstream operating rates rose steadily, and demand-side support remained solid. Overall, the restricted strait passage and conflict spillover risks at the macro perspective resonated with the fundamental supply hard damage and low global inventory, jointly providing strong support for aluminum prices. In the short term, aluminum prices are expected to hold up well.
[The information provided is for reference only. This article does not constitute direct advice for investment research decisions. Clients should make prudent decisions and not use this as a replacement for independent judgment. Any decisions made by clients are not related to SMM.]
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