ADC12 Prices Fall in Overseas Markets, Narrowing Import Losses with Domestic Prices Firm

SHFE aluminum prices corrected slightly in early trading today. Downstream processing enterprises in the central China market were constrained by weak end-user orders and high finished product inventories, leading to subdued buying sentiment. However, amid the widening discount trend, trading firms engaging in both spot and futures market maintained strong buying sentiment, tending to purchase at deep discounts, while suppliers showed notable willingness to hold prices firm. Ultimately, the actual transaction price range in the central China market was centered around a discount of 120-140 yuan/mt against the SHFE aluminum July contract.

[Macro Sentiment Hedging Suppresses Rise, Domestic Destocking Acceleration Supports Aluminum Price Bottom] On the domestic front, positives are increasingly prominent, with the share of liquid aluminum continuing to rise. In the past week, aluminum ingot warehouse withdrawals have hit a four-year high, and the pace of inventory destocking has significantly accelerated, providing support for the bottom of SHFE aluminum. Amid intertwined bullish and bearish factors, US dollar bullish factors abroad are offsetting supply-side and geopolitical bearish factors. After previous overselling, LME aluminum's downward momentum is slowing, and in the near term, it will mainly consolidate at lows for a recovery. Supported by rapid destocking, the likelihood of the domestic market underperforming LME aluminum is low. SHFE and LME may see slight divergence, and a persistently one-sided weak trend is unlikely.

[SMM Cast Aluminum Alloy Morning Comment: Off-Season Demand Hard to Improve, Aluminum Alloy Prices Mainly Move Sideways] The ADC12 market sees coexistence of price adjustments, following rises, and a wait-and-see attitude. The price rise lacks effective support from the demand side, and the market continues to consolidate in the short term.