SMM Aluminum Morning Meeting Minutes, Oct 12:
Futures: The most-traded SHFE aluminum 2611 contract closed at 23,605 yuan/mt, up 225 yuan or 0.96% from yesterday's settlement price. It opened at 23,490.00 yuan/mt during the day and fluctuated between 23,490 and 23,675 yuan/mt. Prices traded below the MA5 (23,662.00), MA10 (23,912.50), MA30 (24,069.50), and MA60 (23,822.92), rebounding after a short-term decline. A rebound-from-lows consolidation structure is emerging, with the short-term moving averages above forming key resistance. The MACD DIF (-100.9745) is below the DEA (1.1214), and the MACD histogram stands at -204.1917, indicating bears still hold strong momentum. The suggested core trading range for SHFE aluminum is 23,300-24,000 yuan/mt. The LME aluminum 3M contract settled at $3,062.50/mt, up 0.18%. It opened at $3,060.00/mt during the day and fluctuated between $3,058.50 and $3,065.00/mt. Prices traded below the MA5 (3,086.00), MA10 (3,115.20), MA30 (3,226.30), and MA60 (3,225.61), rebounding slightly after a short-term decline. A consolidation-at-lows structure is emerging, with the moving averages above forming clear resistance. The MACD DIF (-51.9102) is below the DEA (-35.0124), and the MACD histogram is -33.7957, indicating bears still hold the advantage. The suggested core trading range for LME aluminum is $2,900-3,150/mt.
Macro front: US President Trump said on social media that the Russia-Ukraine conflict has entered an "energy ceasefire" state, and both sides have agreed. Ukrainian President Zelensky said Ukraine supports practical and reliable ways to achieve a ceasefire and end the war, and Ukraine is willing not to strike Russian energy facilities and expects Russia to take the same action. US President Trump has announced the energy ceasefire arrangement, which Ukraine welcomes and hopes will be truly implemented. In August this year, China's Enterprise Credit Index stood at 161.32, up 2.45 points from July. Compared with July, the manufacturing, transportation, warehousing and postal, and wholesale and retail sectors saw faster index growth, with manufacturing reaching its highest ranking so far this year.
Fundamentals: According to SMM statistics, overseas aluminum production fell 2.4% YoY in September 2026, mainly due to lower YoY load at aluminum smelters in the Middle East. Overseas daily average production rebounded 2.2% MoM, as production resumptions in the Middle East and production ramp-ups at new projects in Indonesia, Vietnam, and India continued to drive daily average production higher. Thanks to accelerated production resumptions at Middle Eastern aluminum smelters, total operating capacity in the Middle East has recovered to around 4.5-5 million mt, and total overseas operating capacity has recovered to around 29.65 million mt. Looking ahead to October 2026, production resumptions in the Middle East are expected to continue advancing; new projects in Indonesia and India that started production earlier are expected to continue ramping up, but some projects originally planned to come online in Q4 have experienced varying degrees of delay, and production growth is expected to gradually slow down. As of this Monday, China's aluminum ingot social inventory destocked by 35,000 mt compared to last Thursday, while building up 13,000 mt compared to before the holiday, with aluminum destocking resuming.
Primary aluminum market: In east China, SHFE aluminum futures fell last Friday, spot premiums against SHFE aluminum held firm, and warehouse withdrawal sentiment was good. The nearby SHFE aluminum backwardation structure has widened, and spot prices against the SHFE aluminum 2611 contract will also be relatively high. Intraday SMM A00 aluminum ingot spot transactions closed at premiums of 40-60 yuan/mt. On the second trading day after the holiday, combined with the weekend stockpiling cycle, spot trading sentiment in central China recovered somewhat from the previous day, and downstream procurement sentiment rebounded slightly, but constrained by high in-factory inventory and weak end-user order demand, overall levels remained moderate. Ultimately, actual transaction prices in central China were concentrated in a range of discounts of 20-40 yuan/mt against the SHFE aluminum 2610 contract. In south China, aluminum prices continued to fall on October 9, while the spot market held firm. Absolute prices have fallen to relatively low levels, and with inventory buildup pressure still relatively small, the market regained confidence in the outlook and held prices firm while slowing sales, effectively offsetting the impact of partial discount realization under the widening backwardation structure, with spot circulation gradually tightening. Low prices stimulated replenishment procurement, improving base demand, and market entry sentiment also began to repair, with purchases steadily increasing. Both demand sides responded in the same direction, and transactions improved. Spot transaction prices were concentrated at premiums of 225-265 yuan/mt against the SHFE aluminum 2610 contract.
Aluminum scrap: Last Friday, SMM A00 aluminum closed at 23,650 yuan/mt, down 110 yuan/mt WoW from the previous trading day. Aluminum scrap prices showed regional divergence, with Jiangxi, Foshan, Hunan, Anhui, and Hubei yet to adjust prices today. In terms of price spreads, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was about 2,483 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap was about 1,206 yuan/mt. After the National Day holiday, the aluminum scrap market continued to hold up well. On the supply side, aluminum scrap yards have all resumed operations after the brief holiday, and material release has increased somewhat, but recycling policy constraints on liquidity remain, and the tight invoice supply situation is unlikely to ease in the short term, with tight supply continuing to support prices. On the demand side, as the traditional peak consumption season for cast aluminum alloy gradually kicks off, enterprises are accelerating order-taking and procurement pace, and aluminum tense scrap prices are expected to gain stronger support under the dual-tight supply-demand situation; wrought aluminum alloy demand is moderate, in-factory inventory is relatively ample, but with aluminum scrap supply expected to decline under tax audit restrictions, the price uptrend channel will also gradually open up. However, at present, the release of peak-season demand remains relatively mild, and the actual fulfillment of post-holiday orders still needs close tracking.
Secondary aluminum alloy:Last Friday, the ADC12 market overall continued to operate steadily, with a relatively consistent willingness to hold prices firm. The decline in futures and aluminum prices narrowed somewhat, and market sentiment eased marginally, but the core support for current price performance still comes from the cost side. Against the backdrop of stricter implementation of tax invoice policies, compliant procurement of aluminum scrap is more difficult, and raw material costs remain at a relatively high level, limiting enterprises' room to cut prices. Meanwhile, the recovery of post-holiday market demand still needs further verification. If end-user orders and restocking demand are released less than expected, upward momentum for spot prices will also be constrained. Overall, ADC12 prices are expected to move sideways in the short term, and close attention should be paid to changes in aluminum scrap supply and procurement costs, futures trends, and actual downstream order-taking.
Comprehensive outlook:On the macro side, high US Treasury yields and a strong US dollar continue to weigh on valuations in the nonferrous metals sector. On the industry side, the actual improvement in China's traditional peak-season demand has not fully met previous expectations, and downstream procurement has become more cautious in a high-price environment, weakening price support. On Monday, aluminum ingot inventories destocked by 35,000 mt, providing some price support. Overall, short-term aluminum prices are intertwined with bullish and bearish factors, and are expected to maintain a consolidating adjustment trend in the near term.
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