3.3 SMM Morning Meeting Summary
Futures: During the night session on March 27, the SHFE aluminum 2605 contract opened at 23,815 yuan/mt, hit an intraday high of 24,120 yuan/mt and a low of 23,815 yuan/mt, and finally closed at 24,085 yuan/mt, up 150 yuan/mt from the previous close, or 0.63. Technical analysis showed that the short-term moving averages (SMA5: 23,950.63; SMA10: 23,925.45) had turned upward, with prices holding firmly above the 5-day and 10-day moving averages, confirming a short-term bullish trend. The medium-term moving averages (SMA20: 24,093.00; SMA40: 24,253.74; SMA60: 24,242.57) remained in a downward alignment, indicating that the medium-term trend had not yet reversed, with clear moving average resistance in the 24,100-24,250 range above. On the 4-hour K-line chart, MACD4 turned into red bars (DIFF = -211.72, DEA = -215, STICK = 6.56), with DIFF crossing above DEA to form a golden cross, suggesting that bearish momentum had been exhausted and bullish momentum was beginning to build. In terms of open interest, night session open interest was about 260,000 lots, an increase of 2,484 lots from the previous session. On March 27, LME aluminum opened at $3,262.0/mt, reached a high of $3,303.0/mt, a low of $3,229.0/mt, and closed at $3,284.5/mt, up 0.92 from the previous day. Trading volume was 18,211 lots, down 6,699 lots, and open interest was 688,000 lots, up 7,296 lots.
Macro Front: Recently, the People's Bank of China convened the 2026 Financial Stability Work Conference. The meeting required that in 2026, financial stability work should uphold political guidance, strengthen theoretical grounding, establish and practice a correct view of political performance, deeply integrate Party building with business operations, and ensure a high-standard start and high-quality advancement of financial stability work during the 15th Five-Year Plan period. It also called for continuously improving the system for preventing and defusing systemic financial risks, further deepening and solidifying technology empowerment, strengthening financial risk monitoring, assessment, early warning, and early correction, and continuing to curb incremental risks. Adhering to market-oriented and law-based principles, it urged active and prudent resolution of financial risks in key areas and orderly reduction of existing risks. (Bullish ★) Joanne Hsu, director of the University of Michigan's consumer survey, said that the US consumer sentiment index fell 6 in March to its lowest level since December 2025. Consumer confidence declined across age groups and political affiliations. Middle- and upper-income consumers and those with stock wealth were affected by rising gasoline prices and turbulent financial markets following the Iran conflict, with their confidence falling particularly sharply. Overall, the short-term economic outlook fell 14, expectations for personal finances over the next year fell 10, while the decline in long-term expectations was relatively mild. (Bearish ★)
Fundamentals: Emirates Global Aluminium (EGA) said on Saturday that its Taweelah site in the Khalifa Economic Zones Abu Dhabi (Kezad) industrial park in the Emirate of Abu Dhabi suffered severe damage in missile and drone attacks launched by Iran. The company said it was still assessing the extent of the damage, and multiple employees were injured in the attack. The statement showed that Tavira aluminum smelter's primary aluminum production was 1.6 million mt in 2025. Inventory side, aluminum ingot inventory in China's major consumption regions continued to build up on Monday this week, up 24,000 mt from last Thursday and up 36,000 mt from last Monday.
Primary Aluminum Market:SHFE aluminum 2604 fluctuated downward in early trading, while its center was higher than the previous day. Affected by the rise in futures, shipment sentiment last Friday improved from last Thursday, but some sellers still held back cargoes, with a strong willingness to hold prices firm. Mainstream transaction prices last Friday were concentrated at a premium of 10-20 yuan/mt against the SHFE aluminum 04 contract. Last Friday, the shipment sentiment index in east China was 2.92, up 0.29 WoW; the purchasing sentiment index was 3.22, down 0.17 WoW. Aluminum prices fluctuated continuously over the past few days last week, with bullish and bearish sentiment intertwined in the central China market. Although downstream processing enterprises approached the weekend, stockpiling demand fell short of expectations, and traders remained cautious in purchases, with no large-scale procurement or stockpiling. After 9:30 a.m. last Friday, market trading turned increasingly sluggish, with the market generally tending to widen discounts for transactions. Suppliers showed limited willingness to hold prices firm, and final transaction prices were around parity to a discount of 20 yuan against the central China price. Last Friday, the shipment sentiment index in the central China market was 2.65, up 0.01 WoW; the purchasing sentiment index was 2.38, down 0.03 WoW.
Secondary Aluminum Raw Material:Last Friday, spot primary aluminum pulled back 250 yuan/mt from the previous trading day, and the aluminum scrap market generally followed lower. Amid wild swings in aluminum prices at the time, aluminum scrap yards saw stronger willingness to hold back cargoes, highlighting the resilience of aluminum scrap prices. On the other hand, stricter regulatory oversight under the "reverse invoicing" policy sharply increased tax compliance costs in the aluminum scrap recycling segment. In some regions, as operating procedures had yet to be fully streamlined, the supply of actually compliant, invoiced, and available cargoes remained tight, and supply-side elasticity was significantly weakened by policy frictions. In terms of the price difference between A00 aluminum and aluminum scrap, as of March 26, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was 2,693 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap was 1,403 yuan/mt. The aluminum scrap market is expected to maintain its high-level consolidation pace this week, with the mainstream range for shredded aluminum tense scrap (priced based on aluminum content) likely to hover at 19,800-20,500 yuan/mt (excl. tax). Policy constraints on the supply side are unlikely to ease in the short term, and tight compliant cargo supply, coupled with yards holding back cargoes, will continue to underpin prices. Demand side, peak-season recovery fell short of expectations, downstream players showed strong wait-and-see sentiment amid high prices, and lacked momentum for large-scale restocking, with just-in-time procurement still dominant. Primary aluminum will remain subject to fluctuations driven by geopolitical and macro factors, and the overall tug-of-war between sellers and buyers will persist, warranting caution over the risk of wild swings in prices.
Secondary Aluminum Alloy: Futures side, last Friday, the most-traded aluminum alloy 2605 contract opened at 22,925 yuan/mt and quickly moved lower, hitting an intraday low of 22,825 yuan/mt. It then stabilized and rebounded, gradually fluctuating higher, with the intraday high reaching 23,025 yuan/mt. As of the midday close, it closed at 22,935 yuan/mt, down 5 yuan/mt from the previous close, or 0.02%. Spot side, last Friday, the ADC12 market posted a slight follow-up gain driven by the rebound in aluminum prices. Some enterprises raised quotes by 100–200 yuan/mt due to higher costs, while others chose to keep prices temporarily stable and wait on the sidelines because of their earlier price adjustment pace or weak demand. In terms of transactions, downstream procurement remained mainly demand-based, with no significant improvement in market trading sentiment and insufficient demand-driven momentum. ADC12 prices are expected to continue fluctuating rangebound in the short term. Going forward, close attention should be paid to the impact of developments in the Middle East situation on aluminum prices and the pace of downstream consumption recovery.
Aluminum Market Summary: At present, macro geopolitical risks in the global aluminum market continue to escalate, with risk premiums staying elevated and becoming the core variable dominating market sentiment. Fundamentally, on the supply side, the market heard that an aluminum plant in Bahrain in the Middle East further cut production, involving 320,000 mt of capacity, while the Taweelah smelter of UAE's EGA was attacked on March 28 and suffered severe damage, making the global supply contraction more pronounced. On the demand side, downstream operating rates rebounded further, but the weekly proportion of liquid aluminum was relatively stable. Entering April, as the peak season deepens, the proportion of liquid aluminum is expected to rebound further. On the inventory side, aluminum prices pulled back from earlier levels last week, but wait-and-see sentiment in the market remained strong. Downstream players mainly made just-in-time procurement on dips, and aluminum ingot social inventory failed to enter the destocking stage. From late March to early April, attention should be paid to whether aluminum ingot inventory can smoothly enter a destocking cycle under high aluminum prices. Overall, the geopolitical situation in the Middle East remains the core factor affecting the global aluminum market. Successive production cuts and damage incidents at Middle Eastern aluminum plants are expected to provide strong upward momentum for aluminum prices in and outside China. Coupled with support from expectations of gradually released peak-season demand in China, aluminum prices are expected to hold up well in the short term.
[The information provided is for reference only. This article does not constitute direct advice for investment research decisions. Clients should make decisions prudently and should not use this as a substitute for their own independent judgment. Any decisions made by clients are unrelated to SMM.]
