Alumina Surplus Pressure Persists, Dragging Aluminum Prices Down [SMM Aluminum Futures Brief]

》Check SMM Aluminum Product Prices, Data, and Market Analysis

SMM, March 18:

Today, the most-traded SHFE aluminum 2505 contract opened at 20,910 yuan/mt, with a high of 20,960 yuan/mt and a low of 20,715 yuan/mt, closing at 20,715 yuan/mt, down 0.91%. Trading volume was 131,000 lots, and open interest was 256,000 lots.

SMM Comments: Today, SHFE aluminum was dragged down by alumina, with futures prices breaking key support levels and turning weaker in the short term. On the macro side, the EU plans to investigate aluminum imports and tighten steel tariffs, coupled with weak US February retail data and the OECD's downgrade of global growth forecasts, intensifying market pressure. Domestically, January-February consumption and industrial data showed recovery, and the Ministry of Commerce promoted the integration of domestic and foreign trade, with economic resilience offsetting external risks. Fundamentals side, although the traditional peak season effect of "Golden March and Silver April" continued to emerge, and domestic aluminum inventory destocking at the beginning of March outperformed expectations, the sustained strong performance of aluminum prices challenging the 21,000 yuan mark to some extent impacted the supply-demand pattern of the aluminum industry chain in the spot market. Outflows from warehouses fell back from highs, coupled with increased arrivals over the weekend, making it difficult for domestic aluminum inventory to maintain its previous strong performance in the new week. However, as destocking continues, the overall trend of inventory changes is not expected to alter significantly for now. According to SMM statistics, as of March 17, 2025, the total social inventory of aluminum ingots and aluminum billets decreased by 9,000 mt WoW to 1.162 million mt, with the sixth week of post-holiday destocking at a medium level compared to the same period in the past seven years. Over the 10 weeks before and after the Chinese New Year, cumulative inventory increased by 523,000 mt, up 84.7%, showing mediocre performance. However, SMM emphasized that as the peak season deepens, the marginal strengthening logic of end-user restocking momentum remains.

Today, the most-traded alumina 2505 contract opened at 3,120 yuan/mt, with a high of 3,125 yuan/mt and a low of 3,079 yuan/mt, closing at 3,080 yuan/mt, down 1.25%. Trading volume was 66,000 lots, and open interest was 219,000 lots.

SMM Comments: Recently, the tug-of-war between alumina buyers and sellers continued, with sporadic spot transactions in the alumina spot market and transaction prices seeing further slight declines, with the center mostly at 3,200-3,300 yuan/mt. The domestic alumina export window has closed, and the total registered warrant volume in alumina futures delivery warehouses exceeded 200,000 mt. Subsequent alumina exports and transfers to delivery warehouses may struggle to provide sustained demand. Fundamentals side, in the short term, alumina operating capacity is expected to see simultaneous increases and decreases, with no significant decline in total operating capacity anticipated. This week, the total national alumina operating capacity was 88.26 million mt, with alumina fundamentals maintaining a slight surplus pattern. Spot alumina prices are likely to fluctuate downward in the short term.

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