9.1 SMM Aluminum Morning Meeting Minutes
Futures: SHFE aluminum closed at 24,015 yuan/mt yesterday, up 0.23%, with intraday fluctuations between 23,980 and 24,095. Prices remained above all key moving averages (MA5=23,918, MA10=23,809, MA30=23,757, MA60=23,571), with the moving average system maintaining a bullish alignment and the medium-term uptrend intact. The MACD indicator showed DIF=87.03 and DEA=87.26, with the histogram turning slightly negative to -0.46. DIF and DEA were nearly converged, indicating exhausted short-term bullish momentum and an impending directional choice. Trading volume shrank to 53,400 lots, reflecting a strong wait-and-see sentiment in the market. The suggested core trading range for SHFE aluminum is 23,800-24,400. LME aluminum closed at $3,250/mt, up 0.25%, with intraday fluctuations between 3,243 and 3,253. Prices remained above all key moving averages (MA5=3,237.9, MA10=3,228.55, MA30=3,228.72, MA60=3,237.64), with the moving average system in a bullish alignment. The MACD indicator showed DIF=1.20 and DEA=1.93, forming a death cross near the zero axis, with the histogram at -1.46, indicating weak momentum for both bulls and bears. The suggested core trading range for LME aluminum is 3,220-3,280.
Macro front: US President Trump stated that strikes against Iran would be limited; the situation in the Strait of Hormuz is in very good condition; large volumes of oil are being shipped out of the Strait of Hormuz. Trump reiterated that interest rates are too high, saying he greatly respects Fed Chairman Warsh and that he will do what he has to do. US Treasury Secretary Bessent said that US sanctions are exerting economic pressure on the Iranian regime, prompting Iran to take military action. Bessent stated that the US government will continue to apply pressure, that Iran's economy "does not have to collapse," but that the Iranian regime needs to "come to its senses."
Fundamentals: In markets outside China, overseas aluminum production resumptions and new capacity continued to ramp up as planned, while damaged capacity in the Middle East is gradually recovering. Expectations that the global aluminum market will shift from tight to loose in the longer term persist, continuing to cap the upside room for aluminum prices. However, LME visible inventory remains at a historically low level of around 250,000 mt, providing bottom support for LME aluminum. As oil prices pulled back, overseas smelting energy costs edged lower at the margin, weakening cost support for aluminum prices. Spot premiums improved only modestly, leaving bulls with insufficient momentum to sustain further gains. In the Chinese market, on the inventory side, domestic aluminum social inventory continued its destocking trend this week. As of this Monday, domestic aluminum ingot social inventory fell by 15,000 mt WoW from last Thursday to 837,000 mt, and by 23,000 mt from last Monday, showing counter-seasonal destocking characteristics that provide strong support for aluminum prices. Demand side, downstream processing enterprises are currently operating at neutral rates. With the traditional “September peak season” approaching, the market holds expectations for subsequent demand improvement, but downstream pre-restocking remains limited as buyers wait to see whether peak-season demand actually materializes. Spot transactions are mainly need-based.
Primary aluminum market: SHFE aluminum 2609 futures dipped slightly before quickly rallying, but spot market trading sentiment was relatively mediocre, with spot premiums basically on par with the previous trading day. A00 aluminum ingot spot transactions were at a discount of 20 yuan/mt to parity. Today was the last working day of August, and aluminum futures consolidated in a narrow range. Buying sentiment in the market remained subdued, with only a few top-tier downstream processing enterprises maintaining small need-based purchases. Overall transactions were sluggish. Ultimately, actual transaction prices in the central China market were around a discount of 110-140 yuan/mt against the SHFE aluminum 09 contract. Aluminum prices edged up today, while the spot market was weak. Northern cargoes had not yet arrived, and inventory continued to decline. Suppliers were divided: some chose to hold prices firm and sell slowly based on destocking, while others took a bearish view and proactively lowered quotes to cash out first, leaving relatively more discounted cargoes in circulation. Downstream buyers were somewhat cautious and unwilling to chase higher prices, with purchasing demand weakening from earlier. Traders showed moderate inquiry interest but actual purchases were also limited, generally buying discounted cargoes and showing low acceptance of firm offers. Overall transactions were lackluster.
Aluminum scrap: Today, SMM A00 spot aluminum closed at 23,970 yuan/mt, up 70 yuan/mt from the previous trading day. Domestic aluminum scrap prices generally edged up slightly, with some regions and categories holding steady and waiting. Against the backdrop of a continued rebound in primary aluminum prices, aluminum scrap fluctuations were relatively limited, and the price transmission mechanism was hindered, mainly constrained by two factors: first, with the traditional peak season approaching, downstream secondary aluminum alloy demand has not shown clear improvement; second, high inventory of wrought aluminum alloy scrap such as doors and windows in Henan and other regions has weakened the elasticity of aluminum scrap price increases. In addition, the “reverse invoicing” policy constraint on the supply side persists, and the scarcity of compliant invoiced aluminum scrap provides bottom support for aluminum scrap prices. On imports, the import window has improved recently compared with earlier, with traders showing increased inquiry and purchasing interest, and import supply has increased somewhat. In the short term, the market is at the tail end of the traditional off-season, and orders at downstream scrap utilization enterprises have not yet shown a clear recovery. The pre-peak-season effect is not significant, and scrap utilization enterprises continue to purchase as needed and maintain low inventory strategies, with limited acceptance of higher prices. Some enterprises chose to hold steady and wait after earlier price increases. On imports, previously traded cargoes arriving at ports have provided some supply replenishment, but the deeper effects of the UAE ban and EU tariff increases will still limit the volume of premium scrap imports.
Secondary aluminum alloy: Spot: ADC12 market quotes held up well today. The SMM ADC12 price rose by 100 yuan/mt from the previous trading day to 24,050 yuan/mt, mainly driven by stronger cast aluminum alloy futures and an upward shift in the market price center. Currently, futures gains outpaced spot, and the spot-futures price spread weakened slightly. The futures rebound lent some support to spot prices. However, primary aluminum price gains remained relatively limited. Cost support strengthened marginally but with a relatively small lift, and end-use demand has yet to show clear improvement. Market transactions remained generally lackluster, so enterprises were cautious in following the uptrend, with most raising prices by a modest 100 yuan/mt and some keeping quotes unchanged for now. Overall, ADC12 prices saw their price center shift higher in the near term on stronger futures and cost support, but weak demand still constrained spot gains. Whether prices can rise further will depend on futures performance and improvement in end-use transactions.
Comprehensive outlook: Comprehensive outlook: On the macro front, the Jackson Hole central bank symposium sent hawkish signals. Fed Chairman Warsh struck a hawkish tone in his debut remarks, and ECB officials leaned toward a September rate hike. Expectations of tightening global liquidity intensified, weighing on macro sentiment and pressuring aluminum prices. However, continued destocking in China and the approaching "September peak season" expectations provided solid support below aluminum prices. With bullish and bearish factors intertwined, aluminum prices are expected to continue to consolidate at highs.
[The information provided is for reference only. This article does not constitute direct investment research advice. Clients should make decisions prudently and not use this as a substitute for independent judgment. Any decisions made by clients are unrelated to SMM.]
![Futures consolidate at highs; spot aluminum alloy slightly raised [SMM cast aluminum alloy morning comment]](https://imgqn.smm.cn/usercenter/BrEfh20251217171652.jpg)
