Macro Situation Fluctuated, Domestic Aluminum Prices Under Pressure at the Top Amid High Inventory [SMM Aluminum Price Weekly Review]

Published: May 7, 2026 18:30
[SMM Aluminum Price Weekly Review: Ex-China Supply Gap Supports Prices to Hold Up Well, China Focuses on Aluminum Ingot Social Inventory Turning Point]

SMM May 7 update:

Macro perspective: mixed signals, with Middle East tensions remaining the core influencing factor

The Middle East situation remained volatile, but recent news suggested easing tensions. US President Trump stated that an Iran conflict was "very likely to end" and said both sides were nearing a deal, which could include Iran shipping its highly enriched uranium to the US. US ADP employment data for April recorded 109,000 new jobs, slightly above expectations of 99,000, while the previous reading was revised down from 62,000 to 61,000. St. Louis Fed President Musalem stated that inflation was significantly above target, with risks increasingly tilting toward the inflation side. The market widely expects the US Fed to keep the federal funds rate unchanged. On the domestic front, data released by the National Bureau of Statistics (NBS) on April 30 showed that the manufacturing PMI in April was 50.3%, remaining in expansion territory.

Fundamentals: elevated inventory persisted, aluminum prices remained under pressure

Supply side, boosted by high prices, domestic aluminum smelters increased their load, with operating rates edging up slightly. Demand side, the proportion of liquid aluminum rebounded slightly by 0.2 percentage points this week; downstream, the sector was gradually entering the off-season, with downstream demand appearing somewhat soft, and weekly downstream operating rates declined slightly this week. Overall, as of this Wednesday, national aluminum ingot social inventory saw an inventory buildup of 24,000 mt compared to pre-holiday levels. It was reported that concentrated arrivals of aluminum ingots occurred during the Labour Day holiday, with stockpiling reappearing. Whether the social inventory inflection point can arrive smoothly deserves attention.

In summary, the macro situation remained uncertain. Under elevated inventory pressure, domestic aluminum prices underperformed LME. Attention still needs to be paid to whether the domestic inventory inflection point can arrive smoothly. The most-traded SHFE aluminum contract is expected to trade in the range of 23,900-24,500 yuan/mt next week, while LME aluminum is expected to trade in the range of $3,450-3,550/mt.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

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