4.8 SMM Morning Meeting Minutes
Futures:SHFE aluminum closed at 24,545 yuan/mt last night, down 0.43%. The price was slightly below MA5 (24,643) but near MA10 (24,433.5), MA30 (24,505.67), and MA60 (24,344.17), under short-term pressure but still supported by medium-term moving averages. The MACD indicator DIF (76.15) and DEA (52.88) maintained a golden cross above the zero axis, but the histogram narrowed to 46.55, indicating weakening bullish momentum. The suggested core trading range for SHFE aluminum is 24,400-25,000. LME aluminum closed at $3,506/mt, up 1.02%. The price was running above all moving averages, with MA5 (3,481), MA10 (3,387.65), etc. in a standard bullish alignment, maintaining a solid upward trend. The MACD indicator DIF (62.45) and DEA (48.52) showed a golden cross pointing upward, with a positive histogram (27.85), indicating sustained upward momentum. The suggested core trading range for LME aluminum is 3,480-3,550.
Macro Front:On April 7 local time, US President Trump posted on social media: "I have agreed to a pause on the bombing and strikes on Iran for a period of two weeks." Subsequently, a White House official stated that Israel had agreed to a temporary ceasefire. On the other hand, Iran's Supreme National Security Council issued a statement saying that, based on the Supreme Leader's recommendation and the approval of the Supreme National Security Council, it accepted the ceasefire proposal put forward by Pakistan.
Fundamentals:Supply side, the Middle East conflict impacted core capacity, and the proportion of liquid aluminum in China rebounded significantly. Ex-China supply was directly hit by geopolitical conflicts, with Middle Eastern aluminum enterprises cutting production. Recently, the UAE's EGA and Bahrain's Alba were successively struck by missile attacks, with production facilities damaged. The extent of damage is still under comprehensive assessment. The market widely expects large-scale production cuts or even shutdowns, with the global aluminum supply gap expected to widen and concerns over ex-China supply continuing to escalate. In China, the proportion of liquid aluminum rose in March as downstream enterprises fully resumed work after the holiday, up 9.3 percentage points MoM to 73.7%, higher than early-month expectations. Entering the traditional peak consumption season in April, downstream operating rates continued to rise, and the proportion of liquid aluminum is expected to climb further. Inventory side, high aluminum prices in China suppressed downstream willingness to actively restock, with downstream enterprises generally purchasing as needed based on orders and maintaining low inventory operations, with no large-scale stockpiling behavior for now. On Tuesday, China's aluminum ingot social inventory saw an inventory buildup of 24,000 mt compared to pre-holiday levels, with short-term inventory still at a relatively ample level. Inventories outside China continued to decline, with LME aluminum inventory maintaining a downward trend this week, having fallen to 414,000 mt.
Primary Aluminum Market:SHFE aluminum 2604 fluctuated upward in the morning session, with the center of gravity running lower than the previous day. Affected by the approaching delivery date, some traders purchased cargoes to earn the price spread between futures contracts, and coupled with limited shipments from aluminum smelters, market transactions gradually moved higher. Market transactions were mainly concentrated around the SMM A00 aluminum discount average price to a premium of 20 yuan/mt. Yesterday, the east China market shipment sentiment index was 3.31, down 0.03 MoM; the purchasing sentiment index was 3.64, up 0.09 MoM. Before the opening, central China market traders' quotes continued the trend from the previous trading day, but prices edged slightly lower afterward. Excessive market inventory limited price increases, and with aluminum prices at elevated levels, the lack of peak-season characteristics in end-user orders constrained downstream manufacturers' buying sentiment, and overall market trading atmosphere was rather sluggish. Ultimately, actual transaction prices in the central China market ranged from parity to a premium of 30 yuan over the central China price. Yesterday, the central China market shipment sentiment index was 2.7, flat MoM; the purchasing sentiment index was 2.46, down 0.03 MoM.
Aluminum scrap:Yesterday, spot primary aluminum fell 30 yuan/mt from the previous trading day, while the aluminum scrap market saw mixed changes. Currently, the tightening regulatory stance on the "reverse invoicing" policy remained unchanged, compliance costs in the aluminum scrap recycling process stayed elevated, and actually available invoiced cargoes remained tight. Demand side, the traditional "Golden March, Silver April" peak consumption season underperformed expectations, and downstream scrap utilization enterprises such as secondary alloy producers mostly maintained just-in-time procurement with low inventory operations; high prices combined with wild swings in aluminum prices continued to suppress the purchasing enthusiasm of scrap utilization enterprises, overall market transactions were sluggish, and the "underperform in peak season" pattern persisted. Regarding the price difference between A00 aluminum and aluminum scrap, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was recorded at 3,115 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap in Foshan was 1,825 yuan/mt. The aluminum scrap market is expected to hover at highs and fluctuate upward this week, with shredded aluminum tense scrap (priced based on aluminum content) mainstream range operating around 20,800–21,300 yuan/mt (tax-exclusive). Supply side, regulatory policies such as "reverse invoicing" are unlikely to see substantive easing in the short term, and tight compliant supply combined with continued hold-back-from-selling sentiment at cargo yards will continue to provide price floor support. Demand side, the peak season recovery fell short of expectations, end-user order recovery lacked momentum, and the pattern dominated by just-in-time procurement is expected to persist. In the short term, close attention should be paid to the actual impact of Middle East geopolitical conflicts on global aluminum smelter capacity, downstream end-user order conditions, and the progress of reverse invoicing policy implementation, with vigilance against the risk of wild swings in aluminum prices at elevated levels.
Secondary aluminum alloy:Futures side, yesterday aluminum alloy prices surged rapidly after the morning opening, hitting an intraday high of 23,740 yuan/mt with gains once exceeding 0.7%. Subsequently, bullish momentum waned, prices fluctuated and pulled back, and continued to probe lower approaching the midday session, reaching a low of 23,470 yuan/mt. As of midday, the contract was quoted at 23,505 yuan/mt, down 65 yuan/mt from the previous trading day's settlement price, a decline of 0.28%. Technical side, the 4-hour KDJ indicator turned downward, with obvious short-term pressure; the intraday KDJ pulled back from highs, indicating insufficient intraday rebound momentum. Market sentiment leaned cautious, with the overall pattern showing a volatile structure of pressure and pullback after an attempted rally. Spot side, the ADC12 market continued in the doldrums yesterday. Affected by aluminum prices being in the doldrums and lackluster demand-side performance, market sentiment turned cautious. Most market participants slightly lowered their quotes, while a few enterprises held prices steady and adopted a wait-and-see approach. Low-priced resources increased yesterday, the transaction center shifted downward, and prices showed characteristics of a passive pullback. In the short term, against the backdrop of weakening marginal cost support and limited demand improvement, ADC12 prices are expected to remain in the doldrums.
Aluminum Market Summary:Macro front, the US and Iran reached a two-week temporary ceasefire agreement, and market risk sentiment recovered somewhat. However, the Strait of Hormuz has not simultaneously reopened, and the potential threat of shipping disruptions persists, making it difficult for the geopolitical premium to be fully unwound. Supply side, the substantial damage previously caused is irreversible. Aluminum capacity in the Middle East suffered direct military strikes, with UAE's EGA and Bahrain's Alba successively attacked and production facilities damaged. The global aluminum supply gap expectations expanded significantly, and concerns over ex-China supply continued to escalate. Meanwhile, China entered the traditional peak consumption season, with the proportion of liquid aluminum rebounding sharply to 73.7%, downstream operating rates rising steadily, and demand-side support remaining solid. Overall, the two-week ceasefire news cannot reverse the firm pattern supported by substantial supply damage and low inventory. The expectations of substantial supply contraction triggered by attacks on Middle Eastern aluminum smelters, combined with globally low inventory and China's peak-season demand recovery, will provide strong upward momentum for aluminum prices, with aluminum prices holding 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 prudent decisions and not replace independent judgment with this information. Any decisions made by clients are not related to SMM.]
