SMM ADC12 Price Holds Steady at 23,900 Yuan/mt, Spot Market Shows Resilience

[SMM Central China Spot Aluminum Midday Review] SHFE aluminum futures prices continued to decline. Today, the buying sentiment of downstream processing enterprises in central China recovered slightly, and their willingness to purchase on dips increased somewhat. Moreover, with low absolute prices, the price spread between central China and SHFE aluminum was relatively small, prompting trading firms engaging in both spot and futures markets to sell in large volumes in a concentrated manner, aiming to capture the price spread accrued earlier. Ultimately, actual transaction prices in the central China market ranged around a discount of 60-90 yuan/mt against the SHFE aluminum June contract.

[Geopolitical Disturbances Marginally Weaken, Accelerating Destocking Supports Aluminum Prices Fluctuating Upward] On the macro front, Trump once again claimed that US-Iran negotiations have entered the "final moment," but the market has become desensitized to his repeated similar statements, and the geopolitical risk premium is marginally weakening. On the fundamentals side, the supply gap outside China is expected to provide strong bottom support for aluminum prices, and expectations of rising energy costs also form a bullish driver for aluminum prices; however, the high inventory pressure in China remains relatively evident, which is expected to limit the upside room for China's aluminum prices, and in the short term, China’s aluminum prices are expected to mainly fluctuate and adjust.