SMM Aluminum Morning Meeting Minutes, 4.22
Futures: In the previous night session, the most-traded SHFE aluminum 2506 contract opened at 19,900 yuan/mt, with a high of 19,900 yuan/mt and a low of 19,805 yuan/mt, closing at 19,815 yuan/mt, down 55 yuan/mt or 0.28% from the previous close. LME aluminum opened at $2,386.5/mt, with a high of $2,390.5/mt and a low of $2,383.0/mt, closing at $2,390.5/mt, up $5.5/mt or 0.23%.
Macro: (1) The State-owned Assets Supervision and Administration Commission (SASAC) has made specific arrangements, requiring central state-owned enterprises to take proactive measures, strengthen fund coordination, ensure timely payments, and legally negotiate early payments for small and long-overdue amounts to SMEs, thereby supporting upstream and downstream enterprises in the industry chain (Bullish★). (2) The Ministry of Commerce responded to the US using tariffs to coerce other countries to restrict economic and trade cooperation with China, stating that China respects all parties' efforts to resolve their economic and trade differences with the US through equal consultations. China firmly opposes any party reaching a deal at the expense of China's interests. If such a situation arises, China will not accept it and will take reciprocal countermeasures (Bearish★). (3) The US economy has already been affected by "reciprocal tariffs," and market concerns about the US Fed's independence have led to continued stock market declines. Trump recently stated that US economic growth may slow unless interest rates are cut (Neutral).
Fundamentals: (1) According to SMM statistics, as of April 21, aluminum ingot inventories in Guangdong were 238,000 mt; Wuxi inventories were 224,800 mt; Gongyi inventories were 90,000 mt, with total inventories in the three regions at 552,800 mt, down 2,600 mt from the previous day. SMM believes that destocking in east China remains stable, and national inventories are expected to continue declining in late April. SMM expects daily aluminum ingot inventories in the three regions to fall to around 500,000 mt by month-end (Bullish★). (2) In March 2025, China's net primary aluminum imports were 213,000 mt, up 8.3% MoM but down 14.1% YoY. Cumulative net primary aluminum imports from January to March were 563,000 mt, down 21.7% YoY (Bearish★). (3) According to SMM statistics, aluminum billet outflows from warehouses totaled 68,900 mt during April 14-20, up 7,800 mt WoW (Bullish★).
Primary Aluminum Market: Yesterday, SHFE aluminum fluctuated in the morning session. In the first trading session, aluminum prices opened slightly higher, influenced by continued destocking of domestic aluminum ingot social inventories, but later the center of gravity shifted downward, still fluctuating above 19,800 yuan/mt. In the spot market, regional differences were observed. Specifically, spot premiums in east China continued to strengthen, with transactions at SMM+10 to +20, and market trading was active. This was mainly due to continued destocking stimulating market transactions, and some traders reported that the current aluminum price level was moderate and downstream and traders had pre-holiday stockpiling sentiment ahead of the Labour Day holiday, boosting market transactions. SMM A00 aluminum was quoted at 19,910 yuan/mt, up 80 yuan/mt from the previous day, with a premium of 60 yuan/mt against the May contract, up 10 yuan/mt from the previous day. Trading in central China weakened, mainly due to the futures rebound and increased arrivals. SMM central China A00 was recorded at 19,850 yuan/mt against the SHFE aluminum 2505 contract, up 70 yuan/mt from the previous day, with the Henan-Shanghai price spread at -60 yuan/mt. Actual market transactions were at parity to a discount of 10 yuan/mt against the SMM central China price and at parity against the 2505 contract.
Secondary Aluminum Raw Materials: Yesterday, baled UBC aluminum scrap was quoted at 14,950-15,550 yuan/mt (excluding tax), and shredded aluminum tense scrap was quoted at 15,850-17,350 yuan/mt (excluding tax). By product, shredded aluminum tense scrap and wheel hub removed from vehicle were in tight supply, with overall prices remaining high and unchanged from the previous day, while baled UBC rose by 50 yuan/mt. In the short term, aluminum scrap prices remain high, mainly due to low operating rates at downstream scrap utilization enterprises and tight domestic aluminum tense scrap circulation, supporting aluminum scrap prices. In terms of the price difference between A00 aluminum and aluminum scrap, the price difference for mechanical casting aluminum scrap in Shanghai decreased by 28 yuan/mt WoW to 1,791 yuan/mt; the price difference for aluminum extrusion scrap in Foshan decreased by 48 yuan/mt WoW to 1,588 yuan/mt, with narrow adjustments.
Secondary Aluminum Alloy: Yesterday, aluminum prices rose slightly, with SMM A00 aluminum up 80 yuan/mt from the previous day to 19,910 yuan/mt, while domestic SMM ADC12 prices remained stable at 20,500-20,700 yuan/mt. In the import market, overseas ADC12 prices fell to $2,430-2,450/mt, narrowing the immediate loss on imported ADC12. Current demand remains sluggish, secondary aluminum plants face difficulties in shipments, and finished product inventories are under pressure, making it difficult for prices to rise. In the short term, secondary aluminum alloy prices are expected to remain weak.
Summary: On the macro front, the domestic bullish atmosphere remains, but the impact of the US tariff war continues, and market sentiment is cautious. Fundamentally, domestic aluminum ingot destocking supports spot premiums, providing a strong bottom for aluminum futures, with the futures market fluctuating. In terms of aluminum consumption, the overall operating rate of the aluminum processing sector has slightly corrected, with all sectors except aluminum wire and cable showing slight weakness, and subsequent orders are expected to decline. Aluminum prices lack strong upward momentum, and domestic aluminum prices are expected to fluctuate in the short term.
[The information provided is for reference only. This article does not constitute direct investment research advice. Clients should make decisions cautiously and not use this as a substitute for independent judgment. Any decisions made by clients are unrelated to SMM.]
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