Macro Situation Fluctuated, Domestic Aluminum Prices Under Pressure at the Top Amid High Inventory [SMM Aluminum Price Weekly Review]

Published: May 7, 2026 18:30

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[SMM Aluminum Price Weekly Review: Ex-China Supply Gap Supports Prices to Hold Up Well, China Focuses on Aluminum Ingot Social Inventory Turning Point]

SMM News, May 7:

Macro perspective: Bulls and bears intertwined, with the Middle East situation still the key driver

The Middle East situation remained volatile, but news of easing tensions emerged in recent days. US President Trump said the Iran conflict was “very likely to end” and noted that the US and Iran were close to reaching an agreement, which may include Iran shipping its highly enriched uranium to the US. The US ADP employment data for April showed an increase of 109,000 jobs, slightly above expectations of 99,000, while the prior reading was revised down from 62,000 to 61,000. St. Louis Fed President Musalem said inflation was significantly above target and risks were gradually tilting toward inflation; the market generally expected the US Fed to keep the federal funds rate unchanged. In China, data released by the National Bureau of Statistics (NBS) on April 30 showed that the manufacturing PMI for April was 50.3%, remaining in expansion territory.

Fundamentals: High inventory persisted, keeping aluminum prices under pressure

Supply side, supported by high prices, aluminum smelters in China increased loads, and the operating rate edged up. Demand side, the proportion of liquid aluminum rebounded slightly by 0.2 percentage points this week. Downstream, the market gradually moved into the off-season, with downstream demand slightly weak; the weekly downstream operating rate slipped slightly this week. Overall, as of this Wednesday, nationwide social inventory of aluminum ingot rose by 24,000 mt versus pre-holiday levels. It was reported that aluminum ingot saw concentrated arrivals during the Labour Day holiday, with piling-up reappearing. Whether the turning point in social inventory can arrive smoothly remains worth watching.

Overall, amid repeated macro uncertainties and under high inventory pressure, domestic aluminum prices underperformed LME aluminum, and attention should remain on whether a turning point in China’s inventory can arrive smoothly. The most-traded SHFE aluminum contract was expected to trade in the 23,800-24,800 yuan/mt range next week, while LME aluminum was expected to trade in the $3,450-3,550/mt range.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

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