8.26 SMM Aluminum Morning Meeting Summary
Futures: The most-traded SHFE aluminum 2610 contract closed at 23,975 yuan/mt, up 175 yuan from yesterday's settlement, a gain of 0.74%, with an intraday open of 23,730.00 yuan/mt and fluctuations between 23,720 and 24,075 yuan/mt. Prices were above the MA5 (23,760.00), MA10 (23,843.50), MA30 (23,656.33), and MA60 (23,607.83) moving averages, with the medium and long-term moving averages forming a bearish arrangement and continuing to press downward, while the structure of consolidating at lows and drifting higher persisted, with the upper high-range constituting key resistance. The MACD DI (79.9752) was below the DEA (107.2221), with the MACD green bar at -54.4938, indicating somewhat weakened bearish momentum. The key trading range for SHFE aluminum is suggested at 23,500-24,300 yuan/mt. The LME aluminum 3M contract closed at $3,237.50/mt, down 0.20%, with an intraday open of $3,241.00/mt and fluctuations between $3,236.00 and $3,243.00/mt. Prices were above the MA5 (3,224.40), MA10 (3,232.00), and MA30 (3,221.10) moving averages but below the MA60 (3,257.21), with the medium and long-term moving averages forming a bearish arrangement and gradually pressing downward, revealing a structure of retreat from highs and consolidating correction, with the 60-day moving average above posing clear resistance. The MACD DIF (0.9977) was below the DEA (3.5769), with the MACD green bar at -5.1583, indicating somewhat weakened bullish momentum. The key trading range for LME aluminum is suggested at $3,200-$3,300/mt.
Macro front: Reports said that the US and Iran have reached a ceasefire agreement, which is expected to be officially announced in the coming days. The widely circulated agreement includes freedom of navigation in the Strait of Hormuz and the resumption of negotiations based on the Islamabad Memorandum. Neither the US nor Iran has confirmed the agreement. Meanwhile, reports indicated that US diplomatic missions in the Middle East may start allowing diplomats to return as early as this week and gradually scale back emergency measures previously taken. Iran and Oman issued a joint statement, planning to establish a mutually agreed safe maritime corridor in the Strait of Hormuz. Iran's Deputy Foreign Minister Gharibabadi stated that the memorandum of understanding on the Strait of Hormuz between Iran and Oman does not mean the strait will resume opening from August 26. Under the agreement, shipping lanes entering and leaving the Persian Gulf will pass through Iranian and Omani waters respectively, which Gharibabadi described as "a two-way highway" about 7 nautical miles wide. Gharibabadi pointed out that this lane is temporary, and the two sides will negotiate a permanent route within 30 to 60 days. US President Trump posted that all mines in the international waters of the Strait of Hormuz have been cleared or detonated. Iran has been notified that any vessel laying new mines will be systematically destroyed immediately.
Fundamentals:Supply side, last week, China's aluminum weekly production was stable, with the proportion of liquid aluminum pulling back slightly by 0.02 percentage points. Outside China, driven by new capacity additions and production resumptions, daily average production is expected to continue to rebound. Demand side, the traditional consumption off-season is nearing its end, but the transition period between off-season and peak season has not yet appeared, and the operating rate of the downstream processing sector is under pressure overall. In July, aluminum stranded wire exports edged down MoM, but exports of 102,800 mt far exceeded expectations, and the resilience of aluminum stranded wire exports still existed. Inventory side, the destocking trend of aluminum ingot social inventory continued during the week. This Monday, aluminum ingot inventory in major consumption regions in China stood at 860,000 mt, a destocking of 15,000 mt from last Thursday and a destocking of 26,000 mt WoW from last Monday.
Primary Aluminum Market:The SHFE aluminum 2609 contract futures rose compared to the previous trading day, but overall performance during the morning trading session showed a retreat after a rapid rise, with some suppliers lowering prices. Spot transaction sentiment was not positive, and overall spot premiums/discounts transactions remained unchanged from the previous trading day. The SHFE aluminum 09 contract had a discount of 10 yuan/mt to a premium of 10 yuan/mt. Today, SHFE aluminum futures consolidated, and the trading sentiment in the central China market remained sluggish, with absolute prices and premiums/discounts both at high levels. Downstream purchase willingness was poor, and suppliers sold in large quantities collectively, with weak willingness to hold prices firm, and market transaction prices showed a downward trend. Ultimately, the actual transaction price range in the central China market was around a discount of 50-70 yuan/mt against the SHFE aluminum 09 contract. Today, aluminum prices edged down, and the spot market gradually recovered. Inventory was basically stable, with no inventory buildup pressure emerging, supporting suppliers' future expectations. In the morning, some slightly lowered shipments, while most firmly held prices and held back from selling. Quotes ranged from -10 to +10, with the center gradually lifting, and spot circulation was notably tightened. Downstream maintained a tone of replenishing on demand at lower prices, and demand release was relatively stable. Traders' willingness to absorb non-premium cargoes gradually increased, and effective demand takeover compensated for the lack of the former, with overall transactions improving and sentiment somewhat recovering.
Secondary Aluminum Raw Materials:Today, the SMM A00 spot aluminum price closed at 23,740 yuan/mt, down 60 yuan/mt compared to the previous trading day. Domestic aluminum scrap market prices were basically stable with a wait-and-see stance. Against the backdrop of sustained rising primary aluminum prices, aluminum scrap fluctuations were relatively limited, and the price transmission mechanism was blocked. However, with the recent pullback in primary aluminum, aluminum scrap's resilience to price falls provided an opportunity for narrowing the price difference between A00 aluminum and aluminum scrap. Regarding the price difference between A00 aluminum and aluminum scrap, on August 25, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was 2,255 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap was 1,034 yuan/mt. On the import/export front, according to SMM customs data, in July 2026, China's aluminum scrap imports totaled approximately 119,600 mt, down MoM from 133,000 mt in June, mainly due to the earlier price inversion between Chinese and overseas markets and delayed shipping schedules, with overseas high-quality scrap replenishment remaining low. Affected by the UAE's aluminum scrap export ban and the EU's tariff hike policy, the supply contraction effect in Europe and the Middle East continues to be evident, further consolidating Southeast Asia's position as the major supplementary source. The aluminum scrap market this week is expected to continue its pattern of narrow consolidation, with demand suppressed and costs providing a floor. Currently in the tail end of the traditional off-season, downstream end-user orders are unlikely to see a substantial surge. Scrap utilization enterprises continue their purchasing-as-needed strategy, with a cautious purchasing atmosphere, and the pre-peak-season effect is not yet significant; enterprises still need to wait and see for subsequent order intake. Shredded aluminum tense scrap (priced based on aluminum content) is expected to trade mainly in the range of 19,900-20,700 yuan/mt.
Secondary aluminum alloy:Spot side: Today, ADC12 market offers were generally stable, with SMM ADC12 prices remaining flat from the previous trading day at 23,900 yuan/mt. The demand side has not shown significant improvement, and price hikes still lack sufficient transaction support. Meanwhile, the cost side still provides some support, leaving limited room for further price declines. The market overall presents a state where it is difficult to move up or down, with strong wait-and-see sentiment. However, as the traditional peak season gradually approaches, some enterprises have reported marginal improvements in recent orders, and market expectations for future demand recovery have warmed. In the short term, ADC12 prices are expected to maintain a narrow consolidation trend, with a subsequent focus on changes in the cost side and improvements in end-user demand.
Comprehensive outlook:Macro sentiment fluctuates. New progress has emerged in US-Iran talks, with Iran and Oman planning to establish a safe maritime channel through the Strait of Hormuz, easing market sentiments on geopolitical tensions. On the fundamentals side, China's aluminum ingot inventory destocking trend continues, providing bottom support for aluminum prices. However, driven by newly commissioned and resumed capacity outside China, daily average aluminum production is expected to continue rebounding. The SHFE/LME price ratio has recovered. As orders on hand are fulfilled, export demand is pulling back MoM but short-term resilience remains. On the domestic demand side, the transition period between the off-season and peak season is not yet clear, and the market has some concerns about peak season demand. In the short term, aluminum prices are expected to maintain a consolidation pattern on a subdued 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 not substitute this for independent judgment. Any decisions made by clients are independent of SMM]
