8.11 SMM Aluminum Morning Meeting Summary
Futures: SHFE aluminum closed at 24,190 yuan/mt, up 0.64%, hitting a new recent high. The price stood well above all key moving averages (MA5=23,998, MA10=23,815, MA30=23,312, MA60=23,720), with the MA system in a bullish alignment, confirming a clear medium-term uptrend. The MACD indicator showed DIF at 184.13 and DEA at 75.84, maintaining a golden cross above the zero axis, with the histogram bar expanding to 216.59, indicating growing bullish momentum. Trading volume contracted slightly to 43,800 lots, showing a minor volume-price divergence. The suggested core trading range for SHFE aluminum is 23,800-24,500. LME aluminum closed at $3,346.5/mt, up 0.34%, extending its strong performance. The price was well above all key moving averages (MA5=3,292.9, MA10=3,247.35, MA30=3,183.2), with the MAs in a bullish alignment and the medium-term uptrend intact. The MACD histogram bar expanded to 50.83 (from 40.3 the previous day), reflecting sustained bullish momentum. The suggested core trading range for LME aluminum is 3,320-3,380.
Macro Front: US President Trump stated that Iran is demanding compensation for losses suffered during the past five months of military conflict, and that the US is likewise demanding compensation from Iran, having instructed its representatives to explicitly incorporate this demand into all future negotiations. The 30-year US Treasury yield rose to 5.27%, a 19-year high, while the 10-year yield reached 4.75%, once again nearing 5%.
Fundamentals: Supply side, China's weekly aluminum production remained basically stable this week, with the proportion of liquid aluminum rising 0.19 percentage points MoM. Outside China, aluminum supply is expected to continue increasing as new project ramp-ups and production resumptions progress. However, the global aluminum ingot destocking trend remained unchanged in the short term. Demand side, the downstream processing industry was in the traditional consumption off-season, with total operating rate under pressure; aluminum billet processing fees pulled back, weakening substitution demand for aluminum ingots. Inventory side, China's aluminum social inventory continued its destocking trend this week. As of Monday this week, China's aluminum ingot social inventory destocked by 16,000 mt WoW from last Thursday to 917,000 mt, and by 41,000 mt from last Monday, with the destocking pace narrowing further. Meanwhile, aluminum billet inventory posted a slight buildup, increasing by 4,000 mt WoW. The aluminum ingot inventory is expected to continue its destocking trend in the short term.
Primary Aluminum Market: In early trading, the SHFE aluminum 2608 contract continued to run at high levels, with prices above 24,000 yuan/mt somewhat suppressing downstream procurement, while trading among traders was relatively active. Today's SHFE spot aluminum premiums were mainly centered on a trading range of 8-40 yuan/mt to 08-20 yuan/mt. SHFE aluminum futures continued to rise, and sentiment for spot trades in the central China market cooled slightly. Downstream processing enterprises were constrained by insufficient orders and the continuous increase in aluminum prices, with overall purchase willingness remaining subdued; only trading firms engaging in both spot and futures markets conducted arbitrage purchases. However, against the backdrop of quickly narrowing premiums, sellers increased shipments, and the firmness of their quotes softened. Ultimately, actual transaction prices in the central China market were mainly concentrated at a discount of 120-140 yuan/mt against the SHFE aluminum August contract. Today, aluminum prices extended their gains, and the spot market stabilized and improved. Arrivals remained limited, with inventory showing little increase. Most suppliers were still in no rush to sell for cash at elevated prices, choosing to hold prices firm and sell slowly, while firmly maintaining the baseline of no discount. Quotes ranged from 0 to +10; market liquidity eased somewhat but at a manageable scale. Downstream, faced with high aluminum prices, purchase demand was mediocre, and rigid support also weakened. However, traders gradually entered the market to increase purchases of non-premium cargoes, and large players even strongly bid up prices to procure goods and make a market. Transactions were overall satisfactory.
Aluminum Scrap:Today, SMM A00 spot aluminum price closed at 23,990 yuan/mt, up 10 yuan/mt from the previous trading day. China's aluminum scrap market mainly held steady with a wait-and-see stance, with only baled UBC catching up on gains, posting a daily rise of up to 100 yuan/mt. In terms of the price difference between A00 aluminum and aluminum scrap, on August 10, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was about 2,370 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap was about 1,160 yuan/mt. As primary aluminum prices continued to rise, aluminum scrap lacked momentum to follow, and the price spread widened again. Demand for secondary aluminum alloy and its downstream sectors weakened marginally. Coupled with high inventory of wrought aluminum alloy scrap raw materials such as doors and windows in Henan and other regions, the price transmission mechanism for aluminum scrap was hindered, and the momentum to follow the rise was clearly insufficient. Affected by the traditional consumption off-season, operating rates of downstream cast aluminum alloy enterprises continued to decline, order volumes shrank, and the aluminum scrap market lacked substantial support. Looking ahead, the supply-demand mismatch is unlikely to reverse in the short term. Scrap utilization enterprises will likely maintain purchase-as-needed and low-inventory operating strategies, and trading sentiment in the market will be difficult to see substantial improvement. This week, shredded aluminum tense scrap prices based on aluminum content are expected to be weighed down by stagnant raw material prices and weak downstream demand, remaining under pressure overall, with the mainstream range expected to hover around 20,200-20,800 yuan/mt.
Secondary Aluminum Alloy:Spot market: ADC12 market quotes were generally stable today, with the industry broadly lacking willingness to adjust prices. Recently, futures have strengthened, and inquiries from trading firms engaging in both spot and futures markets have become somewhat more active. However, constrained by weak end-use demand, spot transaction volumes were limited, and price follow-through lacked substantial support. Meanwhile, the cost side continued to provide bottom support, prices were under pressure from both sides, and the market remained in a wait-and-see stance overall. In the short term, ADC12 prices are expected to continue consolidating with stability.
Comprehensive Outlook: Divisions in the Middle East persist, and although the US Fed did not raise rates in July, its overall stance remains hawkish. The fundamental deficit continues, aluminum ingot inventories keep destocking, and in the short term, aluminum prices are expected to consolidate on a strong note.
[The information provided is for reference only. This article does not constitute direct advice for investment research decisions. Clients should make cautious decisions and should not use this as a substitute for their own independent judgment. Any decisions made by the client are unrelated to SMM.]
![Increased Imported Ore Landed Costs and Tight Domestic Ore Supply Pushed Alumina Costs Upward in July [SMM Analysis]](https://imgqn.smm.cn/usercenter/risnW20251217171650.jpg)
