SHFE Aluminum Fluctuated and Closed Higher, Alumina Supply Remained Loose and Operated Under Pressure [SMM Aluminum Futures Brief]

View SMM Aluminum Product Quotes, Data, and Market Analysis

SMM April 1 News:

Today, the most-traded SHFE aluminum 2505 contract opened at 20,445 yuan/mt, with a high of 20,580 yuan/mt, a low of 20,410 yuan/mt, and closed at 20,525 yuan/mt, up 0.49%. The trading volume was 79,000 lots, and the open interest was 194,000 lots.

SMM Comment: Macro side, in recent weeks, due to Trump's escalating and unpredictable tariff policies, concerns about a US economic recession have intensified. Fundamentals side, the aluminum industry chain remains bullish, with the seasonal destocking trend during the "Golden March and Silver April" becoming more evident. Aluminum ingot inventory continued to decline to around 800,000 mt. End-use consumption, such as NEVs, has shown steady growth, and downstream restocking demand has also rebounded. As the peak consumption season approaches, order volumes and operating rates in most sectors have increased, coupled with continued destocking of social aluminum ingot inventory, providing bottom support for aluminum prices. According to SMM statistics, on April 1, the aluminum ingot inventory in Guangdong, Wuxi, and Gongyi totaled 662,400 mt, a decrease of 8,000 mt. LME aluminum inventory decreased by 3,550 mt, down 0.77%. However, the short-term market is still somewhat suppressed by external bearish factors, with the US dollar rebounding to a high level, putting pressure on base metals. In the short term, aluminum prices are expected to maintain a fluctuating downward trend. Continued close attention should be paid to changes in macro sentiment and the actual release of downstream demand.

Today, the most-traded alumina 2505 contract opened at 2,950 yuan/mt, with a high of 2,969 yuan/mt, a low of 2,927 yuan/mt, and closed at 2,951 yuan/mt, up 0.03%. The trading volume was 117,000 lots, and the open interest was 193,000 lots.

SMM Comment: Last week, the weekly operating rate of alumina was lowered again, with the national total operating capacity of metallurgical alumina reduced to 87.3 million mt/year, a weekly operating capacity decrease of 700,000 mt/year MoM. However, the fundamental supply surplus of alumina has not yet reversed. According to SMM data, as of last Thursday, the total operating capacity of domestic aluminum was 43.88 million mt/year, translating to an alumina demand operating capacity of around 84.47 million mt/year, with theoretical demand increasing slightly but still below actual operations. Supply side, domestic bauxite supply remains low with limited increments; imported bauxite supply has driven the total domestic bauxite supply growth, and the supply-demand fundamentals of bauxite may become more relaxed than before. In the short term, bauxite prices are expected to remain under pressure. Meanwhile, downstream aluminum plants reported that alumina procurement is mainly executed through long-term contracts, and some plants that have conducted winter stockpiling plan to actively reduce inventory. Last week, according to SMM statistics, alumina raw material inventory at aluminum plants decreased by 44,000 mt MoM. In the short term, the circulating supply of alumina is expected to remain relatively loose, and alumina prices may continue to operate under pressure. Continued attention should be paid to changes in alumina operating capacity.

[The information provided is for reference only. This article does not constitute direct advice for investment research decisions. Clients should make decisions cautiously and not use this as a substitute for independent judgment. Any decisions made by clients are unrelated to SMM.]