Chinese Aluminum Smelters Reap Huge Profit, SMM Says

[SMM Aluminum Express News] Tsingshan Holding Group, led by Chinese tycoon Xiang Guangda, is in advanced discussions with global trading houses Mercuria Energy Group, Glencore Plc, and Trafigura Group for minority investments in a proposed $3 billion aluminum smelter at the Weda Bay Industrial Park in Indonesia. The planned 800,000-tonne facility (likely in two 400,000-tonne phases) would give the traders direct access to aluminum output while helping Tsingshan reduce its capital burden and gain stronger support from Indonesian authorities. This move comes as global aluminum markets face strain from supply disruptions in the Gulf region and reflects Tsingshan’s continued expansion in Indonesia’s metals sector.

[Geopolitical Disruptions Combined with Supply-Demand Resonance, Aluminum Prices Hold Up Well at Highs] Overall, from a macro perspective, risks of Middle East conflicts persist, resonating with fundamental supply-side hard damage and low global inventory to jointly provide strong bottom support for aluminum prices. However, weak interest rate cut expectations, China's aluminum ingot inventory buildup exceeding expectations, and the adverse expectations on consumption and inflation from recent high fluctuations in oil prices have all notably weighed on the upside room for aluminum prices. In the short term, aluminum prices fluctuate at highs.

[SMM Cast Aluminum Alloy Morning Comment: Aluminum alloy futures closed up 1.64% overnight as bullish sentiment heated up] The aluminum alloy 2606 contract opened at 23,755 yuan/mt overnight and closed sharply higher at 24,130 yuan/mt. At the beginning of the night session, prices moved sideways around the opening level with a steady trend. Mid-session, bulls pushed prices up rapidly, driving futures to the intraday high of 24,200 yuan/mt. Prices then pulled back slightly and consolidated, running above the intraday VWAP throughout the session, indicating a solid bullish structure.