SMM Morning Meeting Minutes, 5.25
Futures:SHFE aluminum closed at 24,470 yuan/mt in the night session on May 22, down 0.14%. The price closed near below MA5 (24,471.70), and below MA10 (24,485.84), MA20 (24,537.80), MA40 (24,622.09), and MA60 (24,654.57), with the moving average system in a bearish alignment. Technical side, the MACD 4-hour indicator showed DIFF crossing above DEA to form a golden cross, with the histogram turning from green to red and slightly expanding and contracting. Combined with bears actively adding positions, this indicated marginal convergence of bearish momentum, but bearish capital was still in play. LME aluminum closed at $3,656.0/mt on May 22, up 0.45%, showing an overall high-level strengthening trend. The price stood firmly above MA5, MA10, and MA20, with short-, medium-, and long-term moving averages in a bullish alignment, and the trend structure remained biased to the upside. The MACD indicator showed DIFF (38.7) and DEA (36) golden cross continuing, with the histogram in red and maintaining a positive range (5.4), indicating short-term upward momentum remained intact. Combined with bulls adding positions, the bullish pattern on futures remained unchanged.
Macro front:On Friday local time, US Fed Governor Waller stated that as the energy shock from the Iran war pushed up prices, he supported making it clear that the probability of the Fed's next rate move being a hike was comparable to that of an interest rate cut. Waller said his current stance was to remain patient and keep rates unchanged until the impact of the war became clearer, but he warned on Friday that he did not rule out the possibility of future rate hikes if inflation did not begin to slow down soon.
Fundamentals:China's total aluminum plate/sheet and strip exports were 3.4256 million mt in 2024 and 3.0741 million mt in 2025, down 10.26% YoY. Cumulative exports from January to April 2026 rebounded 13.5% YoY. Against the backdrop of continued global aluminum raw material tightness, it is not impossible for full-year exports to recover the ground lost in 2025. Inventory side, aluminum ingot inventory in major consumption areas in China was 1.411 million mt on Monday this week, down 1,000 mt WoW from Thursday and down 24,000 mt WoW from Monday.
Primary aluminum market:SHFE aluminum 2606 contract fluctuated upward in the early session last Friday, with the overall price center moving lower compared to the previous trading day. Last Friday, some downstream buyers stockpiled ahead of the weekend, and overall market buying sentiment improved slightly. Influenced by destocking and bullish sentiment, some sellers held prices firm. Mainstream spot cargo quotes in the market ranged from SMMA00 -10 yuan/mt to +10 yuan/mt. The shipment sentiment index in east China was 3.06 last Friday, flat WoW; the procurement sentiment index was 3.10, up 0.04 WoW. Approaching the weekend and with futures aluminum prices pulling back, traders in central China showed significantly stronger willingness to sell while holding prices firm. However, downstream processing enterprises had high raw material inventories, and combined with the relatively small price spread between central China and Shanghai, they tended to prioritize digesting internal inventories, with weak purchasing sentiment. Ultimately, the actual transaction price range in the central China market hovered between a premium of 20 yuan and a discount of 10 yuan to the central China price. Last Friday, the central China market shipments sentiment index was 2.84, up 0.01 WoW; the purchasing sentiment index was 2.27, flat WoW.
Aluminum scrap:Last Friday, SMM A00 prices stopped rising and pulled back, down 40 yuan/mt from the previous trading day, while the aluminum scrap market remained generally stable with minor adjustments in some regional varieties. According to the latest customs data, China's aluminum scrap imports in April 2026 were approximately 171,000 mt, down about 10% YoY. Cumulative imports from January to April 2026 totaled 700,000 mt. In terms of import sources, the main source countries/regions for China's aluminum scrap imports in April were Thailand, the UK, Japan, the US, and Australia, among which Thailand accounted for 20.7% of China's total imports. The aluminum scrap market is expected to continue holding up well at high levels this week, with the mainstream price range for shredded aluminum tense scrap (priced based on aluminum content) maintained at 20,500-21,100 yuan/mt (tax-exclusive). Policy side, "reverse invoicing" regulation continues, and the tight supply pattern of compliant sources is difficult to reverse in the short term; the lagging effect of imported aluminum scrap continues to emerge, with actual port arrivals contracting and expected to further intensify the tight supply situation; geopolitical risks provide bottom support for aluminum prices, which in turn pushes up aluminum scrap prices. However, the peak season effect is fully winding down, with end-use demand somewhat weakening; wrought aluminum alloy scrap inventories in Henan and other regions remain elevated, suppressing purchasing demand, and the secondary aluminum market will continue its pattern of weak supply and demand.
Secondary aluminum alloy:Spot side, last Friday the ADC12 market overall continued its stable-price wait-and-see pattern, with cautious market sentiment, and the SMM ADC12 price held steady from the previous day at 23,700 yuan/mt. Last Friday, prices were "under pressure from both sides" — on one hand, end-use demand recovery was limited, downstream purchasing remained at just-needed levels, and insufficient transaction volume constrained upward price momentum; on the other hand, raw material costs such as aluminum scrap remained elevated, compliant aluminum scrap circulation was tight, and enterprises faced greater difficulty in replenishing raw materials, being forced to rely more on existing inventories to maintain production, with cost support remaining relatively evident. Overall, last Friday the market was still in a tug-of-war between "high cost support" and "weak demand suppression," and ADC12 prices are expected to continue moving sideways in a narrow range in the short term.
Aluminum market summary:Macro front, on May 23 Eastern Time, Trump posted that the US and Iran had largely reached an agreement, with details to be finalised jointly with relevant countries subsequently, and the Strait of Hormuz is also expected to be opened to the outside. However, Iran and related parties promptly toned down the rhetoric, denying that the agreement had been fully implemented. Differences remain between the two sides on core issues such as uranium enrichment, strait control, and sanctions relief, with geopolitical risks easing at the margin. The US Fed meeting minutes were far more hawkish than expectations, with most policymakers supporting policy tightening. Expectations of liquidity tightening are overall bearish for metal prices. Recently, the heads of state of the US and Russia have been making concentrated visits to China, which is expected to yield preliminary results in the economic and trade fields. On the fundamentals side, supply gaps and low inventory outside China still provide bottom support, but elevated inventory in China remains the core factor suppressing significant price rallies. In addition, weak spot market transaction performance further limits the upside room for aluminum prices. Aluminum prices are expected to continue the pattern of LME outperforms SHFE, fluctuating at highs 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 prudent decisions and not use this as a replacement for independent judgment. Any decisions made by clients are not related to SMM. ]
