SMM Oct 15 Aluminum Morning Meeting Minutes:
Futures: The most-traded SHFE aluminum 2611 contract closed at 23,120 yuan/mt, down 225 yuan or 0.96% from yesterday's settlement price. It opened at 23,155.00 yuan/mt and fluctuated between 23,105 and 23,310 yuan/mt. Prices traded below the MA5 (23,332.00), MA10 (23,604.50), MA30 (24,012.83), and MA60 (23,822.42), continuing to weaken and consolidate on a subdued note at low levels, with the moving averages above forming key resistance. The MACD DIF (-205.8355) remained below the DEA (-88.0924), and the MACD green bar stood at -235.4861, indicating persistent bearish momentum. The suggested core trading range for SHFE aluminum is 22,900-23,400 yuan/mt. The LME aluminum 3M contract settled at $2,990.50/mt, up 0.05%. It opened at $2,990.00/mt and fluctuated between $2,988.50 and $2,994.00/mt. Prices traded below the MA5 (3,023.60), MA10 (3,064.80), MA30 (3,196.77), and MA60 (3,217.42), stabilizing slightly at low levels after the continued decline, with a weak consolidation structure emerging at lows and the moving averages above forming clear resistance. The MACD DIF (-65.6867) remained below the DEA (-48.3610), and the MACD green bar stood at -34.6515, with bearish momentum still dominant. The suggested core trading range for LME aluminum is $2,900-3,050/mt.
Macro front: Data released by the US Bureau of Labor Statistics showed that US September CPI rose 3.7% YoY, the largest increase in nearly five months and above market expectations of 3.6%. Core CPI rose 2.6% YoY, versus expectations of 2.5%, marking the largest increase in nearly four months. US September CPI rose 0.6% MoM, the largest increase since April, while core CPI rose 0.3% MoM, above market expectations. Following the data release, traders significantly raised bets on a US Fed rate hike in October. The People's Bank of China will conduct a 700 billion yuan six-month outright reverse repo operation on Oct 15. With 500 billion yuan of six-month outright reverse repos maturing in October, this operation will result in a net injection of 200 billion yuan. The combined rollover of three-month and six-month outright reverse repos in October totaled 400 billion yuan.
Fundamentals: General Administration of Customs data showed that China's unwrought aluminum and aluminum semis exports reached 656,000 mt in September 2026, up 4.8% MoM from 626,000 mt in August (an increase of 30,000 mt) and up 25.9% YoY from 521,000 mt in the same period last year, marking the highest monthly export level in the past three months. On domestic aluminum ingot social inventory, as of Thursday this week, China's aluminum ingot social inventory stood at 636,000 mt, down 15,000 mt from Monday and down 50,000 mt WoW from last Thursday, with aluminum destocking continuing.
Primary aluminum market: East China market, SHFE aluminum futures continued to decline yesterday, with the near-month BACK spread widening to fluctuate around 200-220 yuan/mt, but spot market quotes remained firm. Spot prices against the SHFE aluminum 2611 contract were at a premium of 260-270 yuan/mt during the day. Central China market, SHFE aluminum futures pulled back yesterday, and trading sentiment in the central China market remained sluggish. The inter-contract spread continued to widen, and buying sentiment among downstream processing enterprises and traders remained subdued. Moreover, uncertainty in the futures market prompted suppliers to sell quickly to realize cash and reduce variables, with limited willingness to hold prices firm. Ultimately, actual transaction prices in the central China market were concentrated in a range of a discount of 150-180 yuan/mt against the SHFE aluminum November contract. South China market, aluminum prices continued to fall yesterday, and the spot market remained weak. The backwardation structure was steep, and the elevated basis before and after contract rollover continued to exert major pressure on spot cargoes. Suppliers generally opted to realize cash at high levels in a timely manner, with no intention of holding inventory proactively. Selling enthusiasm was high, and more quotes were lowered, with mainstream quotes ranging from a discount to parity, leaving spot circulation at ample discounts. With absolute prices falling for consecutive sessions, wait-and-see sentiment intensified, and the pace of incremental replenishment remained relatively steady. Coupled with wariness of the high basis and limited market participation, overall demand failed to match supply, resulting in lackluster transactions. Spot transaction prices were concentrated at a premium of 310-350 yuan/mt against the SHFE aluminum 2611 contract.
Aluminum scrap: Yesterday, SMM A00 aluminum price closed at 23,620 yuan/mt, down 90 yuan/mt WoW from the previous trading day. Wait-and-see sentiment spread on the buying side, and aluminum scrap quotes in multiple regions such as Foshan, Hunan, Hubei, and Anhui remained unchanged. In terms of price differences, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was about 2,323 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap was about 990 yuan/mt. As of mid-October, the aluminum scrap market continued to hold up well. Supply side, aluminum scrap yards have all resumed operations after a brief shutdown, and material release has increased somewhat. However, recycling policies still constrain liquidity, with invoice quota limitations being a widespread issue. The tight invoice supply situation is unlikely to ease in the short term, and tight supply will continue to support prices. Demand side, as the traditional peak consumption season for cast aluminum alloy gradually kicks in, enterprises are accelerating order-taking and procurement pace. Under the dual-tight supply-demand conditions, price support for aluminum tense scrap is expected to strengthen further. Demand for wrought aluminum alloy is moderate, and in-factory inventory is relatively ample. However, with tax audits restricting supply, aluminum scrap supply is expected to decline, and the upward price channel will gradually open up.
Secondary aluminum alloy: Futures: Yesterday, the most-traded AD2612 cast aluminum alloy futures contract opened at 23,090 yuan/mt, shot up to 23,125 yuan/mt in early trading before encountering resistance and pulling back. In the morning session, it declined step by step to hit a daily low of 22,970 yuan/mt, then stabilized and consolidated. In late trading, it rebounded on increased volume and closed at 23,060 yuan/mt at midday, down 30 yuan/mt from the previous settlement price, a decline of 0.13%. Resistance is seen at 23,300 yuan/mt, with support at 22,900 yuan/mt. Spot: The ADC12 market was largely stable overall yesterday, with strong short-term wait-and-see sentiment. SMM ADC12 prices were flat from the previous day at 24,500 yuan/mt. Currently, cost support from aluminum scrap raw materials remains firm, and enterprises still have a strong willingness to hold prices firm, limiting the downside for spot prices. Overall, ADC12 prices are expected to continue a steady adjustment trend in the short term, with future movement still hinging on aluminum price fluctuations, changes in aluminum scrap costs, and end-use demand performance.
Overall outlook: US September CPI came in above market expectations, and expectations for US Fed interest rate hikes continued to heat up, persistently weighing on valuations across the nonferrous sector. In China, September unwrought aluminum and aluminum semis exports hit the highest monthly export level in the past three months, with aluminum semis exports maintaining a solid trend. Combined with continued destocking of China's aluminum ingot social inventory, this provides support for prices. On the whole, under pressure from expected US Fed rate hikes, aluminum prices are expected to maintain a weak trend in the short term.
[The information provided is for reference only. This article does not constitute direct investment research or decision-making advice. Clients should make decisions prudently and should not use this as a substitute for their own independent judgment. Any decisions made by clients are not related to SMM.]
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