Macro front, during the period, Trump announced "US tariffs on certain Chinese goods increased to 245%", and China stated that the US has reached an irrational level in weaponizing tariff tools, which China will ignore. It is evident that US tariff uncertainties persist, global trade barriers are increasing, and there may be a short-term negative impact on China's export business. The domestic favorable macro atmosphere remains unchanged, promoting the recovery of domestic demand.
Fundamentals, domestic aluminum operating capacity remains stable, and the resumed capacity in Sichuan and Chongqing has fully resumed and achieved output. The cost side of the aluminum industry rebounded slightly during the week. As of Thursday, the domestic aluminum immediate full average cost was around 16,552 yuan/mt, down 18 yuan/mt WoW, mainly due to the continuous decline in alumina prices, leading to a slight decrease in aluminum costs by 0.1%. Demand side, the significant destocking of domestic aluminum ingot social inventory provides strong support for aluminum prices and spot premiums/discounts. According to SMM statistics, on April 17, the domestic aluminum social inventory was 689,000 mt, a decrease of 35,000 mt from Monday, stimulating downstream stocking sentiment after the price drop; entering mid to late April, some aluminum processing sectors' subsequent orders showed a downward trend compared to the previous peak season, mainly due to the end of the PV installation rush, with some companies reporting that the operating rate may decline next week, coupled with the impact of overseas tariff uncertainties, some sectors have seen a resurgence of overseas purchase wait-and-see sentiment, and subsequent export orders may be affected; State Grid's price collection orders, cables are expected to have a stable and positive operating rate in the future.
Overall, macro-wise, the escalation of the tariff war has led to bearish sentiment in funds; fundamentals, the destocking of domestic aluminum ingot inventory provides support for aluminum futures and spot premiums, the operating rate of the aluminum processing sector remains high in the short term in April, but subsequent orders have shown a downward trend, and domestic aluminum prices are expected to fluctuate mainly, with the most-traded SHFE aluminum contract expected to operate around 19,600-19,900 yuan/mt next week, and LME aluminum expected to operate around $2,370-2,400/mt.
![High-Level Consolidation in Secondary Aluminum[[Weekly Review of Aluminum Scrap and Secondary Aluminum]]](https://imgqn.smm.cn/production/admin/votes/imageskkgTu20240508153005.png)
