9.23 SMM Aluminum Morning Meeting Minutes
Futures: SHFE aluminum closed at 24,245 yuan/mt, edging up 0.02%. The price stood above the MA10 (24,236) but was capped by the MA5 (24,386), still well above the MA30 (24,084) and MA60 (23,729.92). The medium-term bullish structure remained intact, while short-term moving average resistance was evident. On the MACD indicator, DIF stood at 102.44 and DEA at 125.85, with the high-level death cross persisting. The green bar narrowed to -46.80 (previous day -50.36), indicating slightly weakening bearish momentum. Trading volume shrank to 52,300 lots, reflecting a strong wait-and-see sentiment in the market. The suggested core trading range for SHFE aluminum is 24,000-24,600. LME aluminum closed at $3,266/mt, up 0.21%. The price was slightly below the MA5 (3,275.6) and MA10 (3,268.87), but above the MA30 (3,265.58) and MA60 (3,224.66), under short-term pressure while medium-term support remained intact. On the MACD indicator, DIF stood at 5.01 and DEA at 9.32, with a death cross above the zero axis. The green bar expanded to -8.62 (previous day -6.32), indicating weak short-term momentum. The suggested core trading range for LME aluminum is 3,220-3,300.
Macro front: On September 22 EST, US President Trump reiterated in his speech at the 81st UN General Assembly that the US would reach an agreement with Iran after the November midterm elections. Iranian President Pezeshkian traveled to the US to attend the UN General Assembly and is expected to deliver a speech on September 23. Iranian Foreign Minister Araghchi met with US Presidential Envoy Witkoff in New York. Iran proposed that conditions for reopening the Strait of Hormuz include: the US immediately lifting the maritime blockade, immediately unfreezing all Iranian assets, and ending the war on all regional fronts. US President Trump stated that US officials held a three-hour meeting with the Iranian delegation, which was very productive, and another meeting would be arranged in the near future.
Fundamentals: Supply side, China's weekly aluminum production remained stable last week. Some downstream sectors saw certain production cuts, reducing liquid aluminum purchases, and the proportion of liquid aluminum edged down by 0.02 percentage points. Outside China, according to foreign media reports, Alba's operating capacity recovered to around 1.3 million mt, further lifting overseas operating capacity. Demand side, with the upcoming holiday, downstream stocking sentiment picked up slightly. Inventory side, aluminum ingot shipments from Xinjiang were disrupted, and combined with downstream stockpiling, aluminum ingot destocking widened this week. As of this Monday, China's social inventory of aluminum ingots fell by 12,000 mt from last Thursday and by 55,000 mt from last Monday. In the short term, the destocking trend for aluminum is expected to continue.
Primary aluminum market: On Tuesday, SHFE aluminum futures traded lower compared with the same session yesterday, while downstream pre-holiday stockpiling sentiment picked up. Spot aluminum was traded at parity against the SHFE aluminum 2610 contract, followed by active market buying, and then spot aluminum was traded at a premium of 10 yuan/mt against the SHFE aluminum 2610 contract. On Tuesday, SMM A00 aluminum ingot spot was traded between parity and a premium of 20 yuan/mt. On Tuesday, SHFE aluminum futures edged lower from early trading yesterday, prompting traders holding cargoes in the central China market to actively raise their quotes. However, limited by weak actual buying sentiment among purchasing traders and downstream processing enterprises, transactions were poor, and transaction prices from sellers deviated significantly from quotes. Ultimately, actual transaction prices in the central China market were centered around a discount of 70-90 yuan/mt against the SHFE aluminum 2610 contract.
South China market: On Tuesday, aluminum prices continued to edge lower, while the spot market stabilized and improved. Inventory buildup did not continue, domestic arrivals remained limited, and the market showed a firmer stance on holding back from selling, with some even actively attempting to raise prices. Mainstream transactions were concluded at a small premium, and spot supply was tight. With the two holidays approaching, restocking demand was released to some extent, and buying sentiment was expected to be positive, with most buyers following through and accepting firm prices. Overall, the market showed a pattern of weak supply and strong demand, with good transactions. Spot transaction prices were concentrated at a premium of 210-250 yuan/mt against the SHFE aluminum 2610 contract.
Aluminum scrap: On Tuesday, SMM A00 aluminum closed at 24,270 yuan/mt, down another 50 yuan/mt from the previous trading day, while the aluminum scrap market was largely stable and wait-and-see. In terms of price differences, on September 22, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was about 2,512 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap was about 1,291 yuan/mt. On the supply side, the tight raw material supply pattern remained unchanged, and the scarcity of compliant, invoiced aluminum scrap continued to rise. Notably, tax inspections in central China continued to escalate, and the sharp drop in regional aluminum scrap supply will significantly disrupt aluminum scrap circulation. On the demand side, the cast aluminum alloy "September peak season" has been lackluster, with demand yet to see a substantial release. End-user orders improved only slightly from the off-season, without forming concentrated restocking. Demand for wrought aluminum alloy was moderate, and in-factory aluminum scrap inventory was relatively ample. Aluminum scrap prices are expected to continue consolidating on a strong note. On the supply side, the impact of tax inspections continues to spread. If aluminum scrap yards slow down shipments, circulating supply will tighten again, and aluminum scrap prices are expected to find strong support. Going forward, close attention will remain on the chain reactions of tax inspections across the aluminum scrap industry chain and changes in orders at scrap utilization enterprises.
Secondary aluminum alloy: Spot: On Tuesday, ADC12 market quotes were largely stable overall, with only a few enterprises lowering prices by 100 yuan/mt. Spot prices showed some resilience, with SMM ADC12 prices holding steady at 24,500 yuan/mt from the previous trading day. On the cost side, aluminum scrap raw material prices saw limited fluctuations overall. However, as tax invoice policies tightened in multiple regions, compliance procurement requirements for enterprises further increased, and procurement costs for some enterprises remained high, providing strong cost support. Although aluminum prices and futures have pulled back, constrained by high costs, enterprises have relatively limited willingness to proactively lower prices, and sentiment to hold prices firm persists in the market. Short-term ADC12 prices are expected to continue consolidating on a strong note, with cost support and compliant procurement pressure limiting the downside for prices, while weak demand recovery will also constrain the elasticity of further price rises. Going forward, close attention should be paid to the implementation progress of tax invoice policies, changes in aluminum scrap raw material supply, and downstream stockpiling ahead of the dual holidays.
Comprehensive outlook: On the macro front, the Chinese and US heads of state are about to meet, and Chinese and US economic and trade lead officials held consultations in New York, lifting expectations for easing China-US relations. On the fundamentals front, production resumptions in the Middle East continue to accelerate, but some newly launched projects have been delayed, and the pace of operating capacity increases is expected to slow in the coming months. With the short holiday approaching, downstream stockpiling demand supports destocking, and aluminum prices are expected to maintain a consolidation pattern at highs in the short term.
[The information provided is for reference only. This article does not constitute direct advice for investment research decisions. Clients should make decisions prudently and should not use this as a substitute for independent judgment. Any decisions made by clients are not related to SMM.]
![SHFE aluminum falls, spot aluminum purchasing sentiment improves and premiums rise [SMM Aluminum Spot Midday Review]](https://imgqn.smm.cn/usercenter/BrEfh20251217171652.jpg)
