5.11 SMM Morning Meeting Minutes
Futures:The most-traded SHFE aluminum 2606 contract closed at 24,380 yuan/mt, down 0.16%. The price was below MA5 (24,473.00), MA10 (24,628.00), MA30 (24,723.33), and MA60 (24,518.25), with short- and medium-term moving averages all forming resistance and the price breaking below all moving average supports. The MACD indicator DIF (-54.8633) was below DEA (29.5256), with the histogram in negative territory (-168.7777), indicating continued release of bearish momentum. The suggested core trading range for SHFE aluminum is 23,800-24,800. LME aluminum 3M closed at $3,503.5/mt, up 0.04%, moving sideways. The price was below MA5 (3,521.40), MA10 (3,519.55), and MA30 (3,514.08), but remained above MA60 (3,377.78), with short-term moving averages forming resistance while long-term support remained intact. The MACD indicator DIF (20.6646) was below DEA (37.2709), with the histogram in negative territory (-33.2127), indicating continued exhaustion of upward momentum. The suggested core trading range for LME aluminum is $3,450-3,550/mt.
Macro front:Iran delivered its response to the US plan to end the war via Pakistan. Current negotiations focused on ceasing hostile actions in the region. US President Trump said he did not like Iran's response and found it completely unacceptable. Iranian insiders stated that the only plan the negotiating team should formulate is one that safeguards Iran's national rights. If Trump was dissatisfied with it, that would actually be a better outcome. A Qatari LNG carrier successfully passed through the Strait of Hormuz and entered the Gulf of Oman. This was reportedly the first Qatari LNG carrier to transit the Strait of Hormuz in approximately 70 days since the US and Israel launched military operations against Iran.
Fundamentals:China's aluminum processing composite PMI registered 53.9% in April. Although it remained above the 50 mark, it pulled back notably from the March high, indicating that industry prosperity shifted from rapid recovery to mild expansion, with peak-season momentum weakening marginally and structural divergence gradually emerging. Last Friday, the SHFE aluminum 2605 contract fluctuated downward in the morning session, with the overall price center rising from the previous trading day. Invoicing constraints currently constrained market trade shipments. Downstream buyers maintained a strong wait-and-see sentiment, with purchase willingness remaining at a relatively weak level. Dragged down by lackluster spot buying, mainstream transactions were concentrated around SMMA00 aluminum minus 10 yuan/mt to the average price. Last Friday, the east China market shipment sentiment index was 2.74, up 0.08 WoW; the procurement sentiment index was 2.66, up 0.06 WoW. Inventory side, on Monday, aluminum ingot inventory in China's major consumption areas was 1.44 million mt, destocking by 1,000 mt WoW from last Friday.
Primary aluminum market:Last Friday, the SHFE aluminum 2605 contract fluctuated downward in the morning session, with the overall price center rising from the previous trading day. Last Friday, invoicing constraints led to a contraction in trader shipments. Last Friday, downstream buyers showed a strong wait-and-see sentiment, and purchase willingness remained at a relatively weak level. Dragged down by lackluster spot buying, mainstream transactions centered around SMMA00 aluminum minus 10 yuan/mt to the average price. Last Friday, the east China market shipment sentiment index was 2.74, up 0.08 WoW; the purchase sentiment index was 2.66, up 0.06 WoW. Last Friday, SHFE aluminum prices saw a slight correction. In the central China market, the sentiment of accepting price increases but not decreases was evident. Overall buying sentiment recovered slightly compared to last Thursday, but some suppliers held prices firm and held back from selling, and due to invoice shortages, shipment enthusiasm was low, with the trading atmosphere remaining sluggish. Ultimately, the actual transaction price range in the central China market hovered between parity with the central China price and a premium of 10 yuan above the central China price, with relatively small fluctuations. Last Friday, the central China market shipment sentiment index was 2.81, down 0.01 WoW; the purchase sentiment index was 2.28, up 0.01 WoW.
Aluminum scrap:Last Friday, A00 aluminum prices rebounded 170 yuan/mt from the previous trading day, and aluminum scrap market prices generally followed with increases of 100-200 yuan/mt. The mainstream price range for shredded aluminum tense scrap (priced based on aluminum content) hovered around 20,500-21,000 yuan/mt (tax exclusive). The price range for imported zorba (Ningbo Port) was 21,670-21,970 yuan/mt (tax inclusive). Price spread side, on May 8, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was recorded at 2,570 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap was 1,925 yuan/mt. Supply side, the aluminum scrap collection and shipment pace after the holiday remained generally stable compared to April, raw material prices swung wildly, and aluminum scrap yards generally held back from selling and held prices firm; high LME prices led import traders to adopt a cautious strategy, and subsequent imports are expected to pull back. Demand side, the traditional off-season has set in, the operating rate of secondary aluminum producers pulled back slightly, aluminum tense scrap purchasing was on an as-needed basis with low inventory operations, and wrought aluminum alloy scrap was supported by secondary aluminum plate/sheet and strip operating rates but with limited strength. Downstream demand was primarily rigid, with strong wait-and-see sentiment. The aluminum scrap market is expected to remain in the doldrums at high levels next week, with the mainstream price range for shredded aluminum tense scrap (priced based on aluminum content) maintained at 20,500-21,300 yuan/mt (tax exclusive). Supply side, policy constraints are unlikely to ease in the short term, and tight compliant supply coupled with an expected pullback in imports will provide some price support. Demand side, the off-season effect continues, downstream secondary aluminum enterprises remain cautiously on the sidelines, purchasing mainly through small rigid-demand restocking orders. The divergence between aluminum tense scrap and wrought aluminum alloy scrap remains unchanged, order growth is limited, and vigilance is still needed against market risks arising from aluminum price fluctuations and tight supply.
Secondary aluminum alloy:Spot cargo side, last Friday the ADC12 market was stable with a slight recovery. Some enterprises raised quotes slightly by 100 yuan/mt, driven by the aluminum price rebound and rising raw material costs, but most enterprises maintained a cautious wait-and-see attitude. On one hand, the cost side provides certain support for prices, and suppliers' sentiment to hold prices firm has strengthened; on the other hand, downstream demand remains mediocre, and the market remains cautious in accepting high-priced supplies. Against the backdrop of insufficient demand support, enterprises generally adopt a wait-and-see approach with stable pricing and flexible adjustments, and ADC12 prices are expected to continue moving sideways in the short term.
Aluminum market summary:Ex-China aluminum supply disruption risks have not yet subsided, and the ex-China aluminum ingot supply-demand gap will continue to provide support for aluminum prices; meanwhile, the continuation of higher-than-expected inventory buildup in China will weigh on domestic aluminum prices. At the same time, tightened invoicing restricts aluminum ingot spot liquidity, and the weakening spot market further limits upside room for domestic aluminum prices. Key attention should be paid to the potential turning point in China's social inventory, which could drive an aluminum price rebound.
[The information provided is for reference only. This article does not constitute direct advice for investment research decisions. Clients should make prudent decisions and not replace independent judgment with this information. Any decisions made by clients are unrelated to SMM.]
