SMM Morning Meeting Minutes, 4.22
Futures:SHFE aluminum closed at 24,890 yuan/mt, down 0.44%. The price fell below MA10 (25,026) and MA5 (25,269), with short-term moving averages forming resistance, but it remained above MA30 (24,738.83) and MA60 (24,486.08), indicating that medium-term support still exists. The MACD indicator DIF (179.22) and DEA (167.12) maintained a golden cross, but the histogram narrowed significantly to 24.2, with bullish momentum clearly fading. The suggested core trading range for SHFE aluminum is 24,600–25,100. LME aluminum closed at $3,544/mt, up slightly by 0.37%. The price was running below MA5 (3,562.30) and MA10 (3,560.15), under short-term pressure, but well above MA30 (3,437.07) and MA60 (3,295.86), with the medium-term trend unchanged. The MACD indicator DIF (70.54) crossed below DEA (74.09), and the histogram turned negative (-7.09), forming a death cross, indicating weakening upward momentum. The suggested core trading range for LME aluminum is 3,520–3,570.
Macro front:The temporary US-Iran ceasefire agreement was set to expire at 8:00 AM Beijing time on April 22, but a dramatic reversal occurred at the last moment. US President Trump stated that, at the request of Pakistan's Army Chief and Prime Minister, the US would temporarily hold off on military strikes against Iran. Trump said that given the "serious divisions" within the Iranian government, the US decided to extend the ceasefire deadline and demanded that Iran first present a unified negotiation proposal. During this period, the US military would continue its naval blockade of Iran while maintaining military readiness. He stated that the ceasefire would last until Iran submits a proposal and negotiations are completed, "regardless of the outcome." Iran stated that after the US violated the ceasefire agreement, the entry and exit channels of the Strait of Hormuz had been blocked, and all navigation was under the strict control of the Islamic Revolutionary Guard Corps Navy. No vessel would be permitted to pass through the strait until guarantees of a complete lifting of the naval blockade on Iran were obtained. Meanwhile, passage of any warships was also prohibited.
Fundamentals:Supply side, affected by large-scale production cuts at Middle Eastern aluminum smelters, the ex-China aluminum fundamentals showed a clear supply gap; in terms of price movements, LME aluminum outperformed SHFE aluminum, the SHFE/LME price ratio declined, import losses widened, and China's net primary aluminum imports are expected to decrease. However, as China's operating aluminum capacity stayed high, the supply-side fundamentals had not yet shown a clear gap. Demand side, affected by reduced aluminum supply, surging energy costs, and tight oil supply, some downstream processing plants outside China saw production cuts or shutdowns; within China, as the peak season deepened, downstream operating rates rebounded, coupled with increased export orders for some aluminum products, demand performance was moderate. However, aluminum billet processing fees were lackluster, and some billet plants saw production shrink, with the overall aluminum billet operating rate rebounding less than expectations. Overall, the weekly liquid aluminum operating rate declined by 0.08 percentage points last week. This Monday, the national aluminum ingot social inventory saw an inventory buildup of 30,000 mt compared to last Thursday, of which the Wuxi area saw an aluminum ingot inventory buildup of 18,000 mt compared to last Thursday. Whether the social inventory inflection point will arrive smoothly deserves attention.
Primary aluminum market:Yesterday morning, SHFE aluminum 2605 fluctuated downward. End-users overall maintained just-in-time procurement, and traders' buying sentiment was boosted by declining aluminum prices and widening premiums, resulting in good buying sentiment. Mainstream transactions in the market were concentrated around SMM A00 aluminum at -10 yuan/mt to +10 yuan/mt. Yesterday, the east China market shipment sentiment index was 3.36, down 0.04 MoM; the procurement sentiment index was 3.16, up 0.1 MoM. Affected by recent reductions in invoicing quotas among central China market traders, some traders were concerned about insufficient invoicing quotas. Yesterday, the market trading atmosphere was slightly subdued, with both overall shipment and buying sentiment declining slightly. Buyers tended to purchase at lower prices, but suppliers had a strong willingness to hold prices firm, and ultimately market prices pulled back before rebounding slightly. The actual transaction price range in the central China market ultimately hovered between parity and a premium of 20 yuan relative to the central China price. Yesterday, the central China market shipment sentiment index was 2.83, down 0.02 MoM; the procurement sentiment index was 2.36, down 0.03 MoM.
Aluminum scrap:Yesterday, spot primary aluminum pulled back 240 yuan/mt compared to the previous trading day, and aluminum scrap market prices adjusted downward in tandem. Supply side, regulatory enforcement of the "reverse invoicing" policy continued to tighten, compliance costs in the aluminum scrap recycling process remained elevated, and actually available invoiced supply remained tight. Suppliers had strong sentiment to hold prices firm and hold back from selling, and some regional traders adopted a wait-and-see approach on high-priced supply with locked volumes, resulting in low actual market circulation. Demand side, the "Golden March, Silver April" peak season demand remained lackluster. Downstream aluminum tense scrap-based scrap utilization enterprises continued to purchase as needed and operate with low inventory, with limited willingness to accept high-priced resources and an overall conservative procurement pace. Wrought aluminum alloy scrap-based enterprises were in their production peak season with relatively high stockpiling enthusiasm, but price support remained limited. Price spread side, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was recorded at 2,765 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap was 1,798 yuan/mt. Aluminum scrap imports side, according to the latest data released by China's General Administration of Customs, in March 2026, China's aluminum scrap imports were approximately 197,300 mt, up 44.75% MoM significantly and up 7.57% YoY. Cumulative aluminum scrap imports from January to March 2026 totaled 526,300 mt, up 3.9% YoY. However, the current high aluminum price landscape is difficult to reverse in the short term. Import traders generally held a cautious and pessimistic attitude on the procurement side, and subsequent aluminum scrap imports are expected to see a notable pullback. Aluminum scrap market is expected to continue holding up well at high levels this week, with the mainstream price range for shredded aluminum tense scrap (priced based on aluminum content) expected to hover around 21,000-21,500 (tax-exclusive). Supply-side policy constraints are unlikely to ease in the short term, and the tight pattern of compliant supply sources continues. The Strait of Hormuz transit risk triggered by the US-Iran conflict has not fully subsided, and high aluminum prices combined with holders' sentiment to hold back from selling provide floor support for prices. However, demand-side peak season recovery fell short of expectations, with downstream scrap utilization enterprises generally maintaining low inventory and purchasing as needed strategies, while high prices suppressed overall transactions. In the short term, close attention should be paid to the actual impact of the US-Iran conflict on aluminum price fluctuations and expectations for the recovery of end-user orders, with vigilance against the risk of aluminum prices retreating after rapid rise.
Secondary aluminum alloy:Spot cargo side, ADC12 market prices continued their downward trend yesterday, with enterprises generally seeing declines concentrated in the range of 100–200 yuan/mt. In terms of driving factors, on one hand, weakening aluminum prices loosened cost support; on the other hand, persistently weak downstream demand and limited order release, coupled with increasing low-priced resources in the market, further intensified price competition. Under the pattern of weakness in both supply and demand, enterprises mostly resorted to passive price cuts for shipments, with limited willingness to hold prices firm. In the short term, if no significant improvement is seen on the demand side, ADC12 prices are expected to remain in the doldrums.
Aluminum market summary:Macro front, a dramatic reversal occurred on the eve of the US-Iran ceasefire agreement expiration: Trump announced an extension of the ceasefire while maintaining the maritime blockade on Iran, and Iran also stated it would continue to block the Strait of Hormuz, prohibiting any vessel passage until the US lifts the blockade. The disruption of this critical waterway would directly impact global energy and material transportation, with geopolitical risk premiums staying high and providing sustained support for aluminum prices. Ex-China, large-scale production cuts at Middle Eastern aluminum smelters widened the supply gap, LME aluminum rose sharply, the SHFE/LME price ratio declined, import losses widened, China's net primary aluminum imports are expected to decrease, and the transmission support from LME to SHFE aluminum strengthened. China's demand side, the peak season rebound in downstream operating rates combined with incremental export orders showed moderate performance, but weak aluminum billet processing fees led to production cuts at some enterprises, and the weekly liquid aluminum operating rate edged down by 0.08 percentage points, indicating that domestic consumption recovery was not broadly robust. Overall, the strait blockade continues, the ex-China supply gap and ongoing LME inventory drawdowns support LME prices to hold up well, while China's aluminum ingot inventory remains at high levels, and attention should be paid to whether the domestic inventory inflection point can arrive smoothly.
[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 not related to SMM.]
