9.3 SMM Aluminum Morning Meeting Minutes
Futures: The most-traded SHFE aluminum contract opened at 23,895 yuan/mt in the night session on September 29, reached a high of 23,960 yuan/mt and a low of 23,845 yuan/mt, and closed at 23,910 yuan/mt, down 110 yuan/mt or 0.46% from the previous close. Futures came under pressure and weakened, with prices falling below the 5/10/20/40/60 moving averages across all timeframes. All moving averages turned downward, and bearish pressure was evident. Trading volume during the session was 57,873 lots, with open interest at 267,000 lots, up 1,187 lots, driven mainly by bearish position building. On the technical front, the 4-hour MACD death cross continued, with DIFF well below DEA and the green histogram expanding further, as bearish momentum continued to be released. On September 29, LME aluminum 3M opened at $3,246.0/mt, reached a high of $3,268.5/mt and a low of $3,205.5/mt, and closed at $3,213.5/mt, down $34.5/mt or 1.06% from the previous close. Futures fell under pressure, with prices breaking below the 5/10/20/40 moving averages across all timeframes and approaching the 60-day moving average, as the short-term trend weakened. Trading volume for the day was 23,778 lots, with open interest at 577,000 lots, up 2,441 lots, driven mainly by bearish position building. On the technical front, a death cross formed on the daily MACD, with DIFF crossing below DEA and the green histogram expanding further, as bearish momentum continued to be released. Macro front: The People's Bank of China further adjusted and improved multiple monetary policy tools: it lowered the PSL interest rate by 0.25 percentage points to 1.5% and expanded PSL support to the construction of the "six networks"; increased the relending quota for technological innovation and technical transformation by 200 billion yuan to 1.4 trillion yuan, with the support ratio raised to 100%; and increased the relending quota for agriculture and small businesses by 500 billion yuan to 4.85 trillion yuan. According to data released on Tuesday, the US Conference Board Consumer Confidence Index fell 6.7 points to 81.9 in September, the lowest level since 2014 and well below all forecasts by economists surveyed by Bloomberg. The deterioration in confidence was broad-based, affecting all age groups, income brackets, and regions. According to CME "FedWatch": the probability of the US Fed keeping rates unchanged at 3.75%-4.00% at its October meeting is 49.6%, while the probability of a 25-basis-point hike is 50.4%. The probability of the US Fed keeping rates unchanged at 3.75%-4.00% through December is 8.5%, with a 49.8% probability of a cumulative 25-basis-point hike and a 41.8% probability of a cumulative 50-basis-point hike.
Fundamentals: In September 2026, China's aluminum processing industry composite PMI came in at 53.9%, returning above the 50 mark after two months. The production index was 55.6% and the new orders index was 55.9%, indicating that the traditional September-October peak season did provide a phased floor for operating rates and order intake. However, structural contradictions were equally acute: the new export orders index was only 47.3%, still in contraction territory; the product inventory index was 56.8%, with end-users wary of high prices and slowing cargo pick-up leading to finished product backlogs; the purchase price index was 50.8%, and raw material inventory was 58.2%, indicating strong willingness among enterprises to stockpile. As of this Wednesday, China's aluminum ingot social inventory fell by 36,000 mt from this Monday and by 40,000 mt from last Thursday.
Primary aluminum market: With the National Day holiday approaching, trading sentiment in the central China market was even more sluggish WoW from yesterday, with suppliers inclined to clear inventory quickly, unwilling to hold goods over the holiday, and showing little willingness to hold prices firm. Downstream processing enterprises had low willingness to stockpile before the holiday, and most had already made large purchases at earlier low prices. Ultimately, actual transaction prices in the central China market were around a discount of 40-80 yuan/mt against the SHFE aluminum 2610 contract. On Tuesday, the SHFE aluminum 2610 contract fell by about 100 yuan/mt from the same trading session yesterday, while spot market transactions were active and improving. At the start of today's morning session, spot A00 aluminum ingots began trading, with mainstream transaction prices at a premium of 40-50 yuan/mt against the SHFE aluminum 2610 contract.
South China market: On Tuesday, aluminum prices continued to edge lower, and the spot market remained weak. Timely shipments to cash in and recoup funds before the month-end holiday remained the dominant theme; after brief attempts to hold prices firm failed, suppliers quickly turned to lowering prices, with even cheaper cargoes not uncommon. Against the backdrop of continued destocking, spot supply remained relatively ample. Demand-side buying was modest at lower prices, but room was already relatively limited. Coupled with expectations of potentially higher arrivals during the holiday, wait-and-see sentiment before the holiday grew stronger, with fewer buyers entering the market and lackluster transactions. Spot transaction prices were concentrated at a premium of 245-285 yuan/mt against the SHFE aluminum 2610 contract.
Aluminum scrap: On Tuesday, SMM A00 aluminum closed at 24,110 yuan/mt, down 60 yuan/mt from the previous trading day. The aluminum scrap market lowered prices by 50-100 yuan/mt, while in some regions, after following the futures down by 200-300 yuan/mt the previous day, scrap aluminum quotes were kept flat or raised by 100 yuan/mt today as futures rebounded, with cumulative declines this week holding at 200 yuan/mt. In terms of price differences, on September 29, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was about 2,519 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap was about 1,353 yuan/mt. On the import side, August scrap aluminum imports recovered MoM, mainly due to the resumption of shipping schedules and replenishment from Southeast Asian sources. In terms of supply, tax inspections in Henan, Hunan, and other regions continued to deepen and expand, with compliant invoiced aluminum scrap becoming increasingly scarce and prices strongly supported. Meanwhile, non-invoiced cargoes faced narrowing sales channels under compliance pressure, forcing some traders to cut prices to sell, with prices remaining under pressure and trending lower. On the demand side, the cast aluminum alloy market saw a lackluster "September peak season," with demand yet to show substantial growth; demand for wrought aluminum alloy was moderate, and in-factory inventory of aluminum scrap remained relatively ample. This week, the aluminum scrap market is expected to continue consolidating on a strong note, with mainstream shredded aluminum tense scrap (priced based on aluminum content) likely to trade in the range of 20,500-21,200 yuan/mt.
Secondary aluminum alloy:Spot market: On Tuesday, the ADC12 spot market overall remained stable. On one hand, although aluminum prices and cast aluminum futures weakened, the decline in aluminum scrap raw material prices was limited, and stricter tax policies kept compliant procurement costs high, providing strong cost-side support for spot prices and limiting the willingness to follow the decline. On the other hand, with the National Day holiday approaching, downstream pre-holiday stockpiling was mediocre, with no significant increase in market transactions, and demand-side upward momentum was insufficient. Amid the tug-of-war between cost support and weak demand, short-term enterprise quotes are expected to remain stable, and future trends will require close attention to actual pre-holiday transactions, raw material costs, and futures movements.
Comprehensive outlook:On the macro front, the US Fed's hawkish rate hike cycle restart, a strong US dollar, and high US Treasury yields continued to pressure valuations of nonferrous metals; fundamentally, although domestic inventory remained low and destocking continued, the rebound in casting ingot volume combined with aluminum billet production cuts weakened liquid aluminum demand, and position adjustment pressure ahead of the National Day holiday intensified the tug-of-war between longs and shorts. Aluminum prices are expected to mainly consolidate with adjustments.
[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.]
