China's Secondary Aluminum Alloy Ingot Inventory Rises 363 MT Post-Holiday

[Geopolitical Tensions Boost LME, China Inventory Buildup and Weakening Demand Under Pressure] In the short term, the core pattern of LME outperforming SHFE in the aluminum market is difficult to reverse. The strength in LME will support room for SHFE aluminum to catch up after the holiday, but high inventory and weak demand in China will suppress overall gains. Going forward, the focus should be on the pace of aluminum ingot destocking in China and the strength of rigid demand release from downstream resumption of work and production resumptions.

[SMM Cast Aluminum Alloy Morning Comment: Secondary Aluminum Prices Continued to Fall Before the Holiday, Stocking Demand Significantly Insufficient] On the last day before the holiday, the ADC12 market overall continued to be in the doldrums. Affected by the pullback in primary aluminum prices and sluggish downstream demand, enterprises actively lowered their quotes by small margins, and the mainstream transaction center shifted downward. Meanwhile, as the Labour Day holiday approached, downstream enterprises successively entered production suspension or production cuts mode, stocking demand before the holiday was significantly insufficient, and market trading sentiment turned sluggish. In the short term, ADC12 prices may remain in the doldrums, and after the holiday, attention should be focused on the pace of downstream production resumption and demand recovery.

In the short term, the core pattern of LME outperforms SHFE is unlikely to reverse. Strength in the overseas market will support SHFE aluminum's post-holiday catch-up potential, but high domestic inventory and weak demand will cap overall gains. Going forward, key focus will be on the pace of China aluminum ingot destocking and the strength of rigid demand release from downstream production resumptions.