7.24 SMM Aluminum Morning Meeting Summary
Futures: SHFE aluminum closed at 23,280 yuan/mt, slightly down 0.02%, with prices above MA5 (23,197) and MA10 (23,192.5), and the closing price of 23,280 exactly matching MA30 (23,276.67). Short-term moving average support is effective, while the mid-term moving average pressure faces a test. MACD indicator: DIF = -119.91, DEA = -200.06, maintaining a golden cross, with the histogram widening to 160.3 (previous 151.86), indicating continuously strengthening bullish momentum. Trading volume slightly expanded to 60,400 lots but remained low. The recommended core trading range for SHFE aluminum is 23,000-23,500. LME aluminum closed at $3,184/mt, down 0.19%, with prices above MA5 (3,172.9) and MA10 (3,168.55) but below MA30 (3,201.05) and MA60 (3,400.82), providing short-term support but clear medium-term resistance. MACD indicator: DIF = -43.29, DEA = -63.01, maintaining a golden cross, with the histogram widening to 39.44 (previous 38.99), indicating continuously strengthening bullish momentum. The recommended core trading range for LME aluminum is 3,150-3,220.
Macro Front: The U.S. Trade Representative issued a notice, invoking Section 301 of the Trade Act of 1974, to impose additional tariffs of 10% to 12.5% on dozens of countries and regions under the pretext of “forced labor,” replacing the soon-to-expire global import tariffs. The new tariffs will take effect at 12:01 a.m. Eastern Time on July 24. It is understood that crude oil, natural gas, fertilizers, and food were exempted from this tariff hike. The U.S. Trade Representative’s office stated that this measure will affect 60 economies.
Fundamentals: In markets outside China, aluminum production resumptions and new capacity continued to ramp up as planned. Market expectations of a shift from tightness to surplus in the global aluminum market over the long term persisted, continuously capping the upside room for aluminum prices. However, persistent Middle East shipping risks continued to cause disruptions, with market concerns about regional aluminum raw material inflows and finished product outflows being hampered. Coupled with higher crude oil pushing up overseas smelting energy costs, this provided some floor support for aluminum prices in the short term. Currently, LME visible inventory remains low, but the improvement in spot premiums is limited, leaving bulls with insufficient momentum for further advances. Inventory side, China’s domestic aluminum social inventory continued its destocking trend this week. As of Thursday, domestic aluminum ingot social inventory destocked by 16,000 mt from Monday to 1.006 million mt, and was down 18,000 mt WoW.
Primary Aluminum Market: In early trading, the SHFE aluminum 2606 contract center ran higher than the same period of the previous trading day. Affected by the off-season, market purchasing sentiment remained weak. Coupled with still ample market availability, market price acceptance failed to pick up. Mainstream transaction prices were at a discount of 10-20 yuan/mt against the SHFE aluminum August contract. Today's east China selling sentiment index stood at 3.13, up 0.03 day-on-day; the purchasing sentiment index stood at 2.90, flat day-on-day. Today's central China trading atmosphere remained sluggish. Safety checks slightly restricted the production pace of downstream processing enterprises, and factories showed low enthusiasm to purchase, dragging down overall purchasing sentiment in the market. But aluminum prices consolidating and recovering lifted some suppliers' selling sentiment. Suppliers showed weak willingness to hold prices firm, and only large players maintained high premiums. Ultimately, actual transaction prices in the central China market ranged around a discount of 120-140 yuan/mt against the SHFE aluminum August contract. Today's central China selling sentiment index stood at 3.09, up 0.02 day-on-day; the purchasing sentiment index was 2.87, down 0.03 day-on-day.
Secondary Aluminum Raw Materials:Today, SMM A00 spot aluminum price closed at 23,170 yuan/mt, up 90 yuan/mt from the previous trading day, while the aluminum scrap market remained broadly stable. On the price difference front, on July 23, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was about 2,100 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap was about 780 yuan/mt, continuing to hover at historically extremely low levels. In terms of imports, customs data showed that China's aluminum scrap imports totaled about 132,800 mt in June 2026, down for the third straight month from 152,000 mt in May. In terms of cumulative data for 2026, aluminum scrap imports totaled about 981,800 mt from January to June. Recently, orders for imports from Southeast Asia in Guangdong increased. Although the import window improved from earlier, new transactions were mostly concentrated in low-priced resources, and overall spot market activity remained limited. Affected by the UAE's aluminum scrap export ban and the EU's tariff hikes, the shrinkage effect on high-quality imported aluminum scrap supply will become more evident in the future. Next week, the aluminum scrap market is expected to continue its tight consolidation pattern with demand suppression and cost support. Against the backdrop of deepening off-season, downstream end-use orders are unlikely to see substantial improvement, scrap utilization enterprises continue their strategy of purchasing as needed, and the purchasing atmosphere is unlikely to improve significantly. The mainstream trading range of shredded aluminum tense scrap (priced based on aluminum content) is expected near 19,800-20,500 yuan/mt. Currently, the price difference between primary aluminum and aluminum scrap has narrowed to historical lows, greatly weakening the economic advantage of aluminum scrap over primary aluminum. If primary aluminum prices continue to fall, the substitution effect of primary aluminum for scrap will accelerate, and it is necessary to closely monitor the crowding-out effect of aluminum price trends on aluminum scrap demand.
Secondary Aluminum Alloy:Spot side: Today, ADC12 market quotes remained mainly stable. From market performance, the rise in primary aluminum prices provided some support to secondary aluminum alloy costs, but end-use demand was weak and downstream purchasing maintained a need-based pace. Against the backdrop of a tug-of-war between cost support and weak demand, most enterprises still focus on selling at stable prices and observing the market, with insufficient motivation to actively adjust prices. The ADC12 market is expected to continue to move sideways in the short term, and close attention should be paid to changes in aluminum scrap costs, primary aluminum price trends, and the improvement of end-user orders.
Overall outlook: Recently, sentiment on the macro front has improved slightly. The persistent geopolitical risk premium in the Middle East, combined with China's aluminum ingot continuing destocking, has jointly underpinned aluminum prices. However, the continuous commissioning of ex-China aluminum capacity over the long term, weak end-use demand in China, and repeated uncertainties at the macro perspective have exerted significant pressure on the upside room of aluminum prices. In the short term, aluminum prices are expected to maintain a consolidation pattern.
[The information provided is for reference only. This article does not constitute direct investment research or decision-making advice. Clients should make decisions prudently and should not use this as a substitute for independent judgment. Any decisions made by clients have nothing to do with SMM.]
![Alumina Grinds Lower on Shrinking Volume, Breaking Below Short-Term Moving Averages; Spot Alumina in the Doldrums; Prices Outside China Continue to Strengthen [SMM Alumina Morning Comment]](https://imgqn.smm.cn/usercenter/nkdst20251217171652.jpg)
