Macro Sentiment Tends to Ease, Domestic Inventory Continues to Decline, Supporting Aluminum Prices [SMM Aluminum Morning Meeting Summary]

》Click to view SMM Aluminum Industry Chain Database

》Order to view SMM Metal Spot Historical Prices

4.15 SMM Aluminum Morning Meeting Summary

Futures: Last night, the most-traded SHFE aluminum 2506 contract opened at 19,690 yuan/mt, with a high of 19,720 yuan/mt and a low of 19,635 yuan/mt, closing at 19,680 yuan/mt, down 35 yuan/mt or 0.18% from the previous close. Yesterday, LME aluminum opened at $2,400/mt, with a high of $2,425/mt and a low of $2,372/mt, closing at $2,378.5/mt, down $18.5/mt or 0.77%.

Macro: (1) US Fed Governor Waller: In the case of large-scale tariffs, if there is a significant economic slowdown, he would prefer earlier and larger interest rate cuts. In the case of smaller tariffs, rate cuts may occur in H2. The impact of tariffs on inflation is expected to be temporary. (Bullish★) (2) US March New York Fed 1-year inflation expectations were 3.58%, compared to the expected 3.26% and the previous 3.13%. (Bearish★) (3) According to customs statistics, China's goods trade imports and exports in Q1 totaled 10.3 trillion yuan, up 1.3%. A spokesperson for the General Administration of Customs stated that while China's exports are indeed facing a complex and severe external environment, "the sky will not fall." (Bullish★)

Fundamentals: (1) Aluminum ingot outflows: According to SMM, domestic aluminum ingot outflows totaled 154,400 mt during 4.7-4.13, up 30,900 mt WoW. (Bullish★★) (2) According to SMM, domestic mainstream consumption area aluminum billet inventory on April 14 was 226,400 mt, down 8,700 mt WoW. (Bullish★) (3) The latest data from the General Administration of Customs shows that China exported 506,000 mt of unwrought aluminum and aluminum products in March 2025; cumulative exports from January to March were 1.365 million mt, down 7.6% YoY. (Bearish★)

Primary aluminum market: Yesterday morning, the aluminum price center rebounded above 19,800 yuan/mt. Although the center slightly declined in the second session, it remained at a high level of 19,750 yuan/mt. In the spot market, the rebound in the aluminum price center led to strong wait-and-see sentiment among end-users, and the shipment pace of downstream processing materials was hindered. Meanwhile, upstream suppliers were less active in selling due to the weakening spot-futures price spread, and spot premiums slightly declined, with transactions at a discount of 10 yuan/mt against the SMM A00 average price. Spot trades showed no improvement from the previous trading day. SMM A00 was at a discount of 10 yuan/mt against the SHFE aluminum 2504 contract, down 40 yuan/mt from the previous day. SMM A00 aluminum ingot was recorded at 19,760 yuan/mt, up 180 yuan/mt from the previous day. Similarly, in the central China market, suppliers were less active in selling due to weak spot premiums. The aluminum price rebounded slightly, and the pick-up pace of downstream processing enterprises slowed. Buyers and sellers were in a stalemate around parity in central China. SMM central China A00 was recorded at 19,710 yuan/mt against the SHFE aluminum 2504 contract, up 190 yuan/mt from the previous day. The Henan-Shanghai price spread was -50 yuan/mt, with actual transactions at parity to a discount of 10 yuan/mt against the SMM central China price and a discount of 60 yuan/mt against the 2504 contract.

Secondary aluminum raw materials: Yesterday, spot primary aluminum rose 180 yuan/mt from the previous day, with SMM A00 spot closing at 19,760 yuan/mt. The aluminum scrap market followed primary aluminum with a slight rebound today, but downstream demand did not show a clear peak season trend, maintaining purchasing as needed. Yesterday, baled UBC was quoted at 14,800-15,400 yuan/mt (excluding tax), and shredded aluminum tense scrap was quoted at 15,850-17,350 yuan/mt (excluding tax). By region, Hunan, Hubei, Foshan, and Jiangxi showed a clear stance of standing firm on quotes, without significant price adjustments following the primary aluminum market. Other regions such as Shanghai, Jiangsu, Henan, and Anhui saw slight price increases following A00. By product, shredded aluminum tense scrap and wheel hub removed from vehicle prices remained unchanged from the previous day. In the short term, domestic aluminum scrap supply is unlikely to increase, and demand is weakening. Due to the off-peak season effect in the aluminum processing industry, orders are insufficient, and restocking momentum is limited. The price difference between A00 aluminum and aluminum scrap narrowed slightly, but long-term structural support remains. Attention should be paid to marginal changes in supply and demand and macro policy guidance.

Secondary aluminum alloy: Yesterday, the aluminum price rebounded, with SMM A00 aluminum up 180 yuan/mt from the previous day to 19,760 yuan/mt. Domestic SMM ADC12 prices remained stable in the range of 20,500-20,700 yuan/mt. In the import market, overseas ADC12 was quoted at $2,460-2,490/mt, with the immediate loss of imported ADC12 narrowing slightly. Yesterday, the aluminum price center rose, but the secondary aluminum market lacked follow-up momentum, and most quotes remained stable. Short-term aluminum price fluctuations have intensified downstream enterprises' risk aversion, with rigid procurement being the main focus, and market trades remained sluggish. It is expected that secondary aluminum alloy prices will continue to fluctuate weakly in the short term.

Summary: On the macro front, the US dollar index hovered around the 100 mark on Monday, finally closing at 99.7, down 0.15%. Recent tariff escalations have impacted the global aluminum trade chain, raising costs and exacerbating supply-demand mismatches. Overseas risk aversion has increased, but previous bearish factors have been digested to some extent, and market concerns about the impact of re-export trade on aluminum demand have eased. The US announced exemptions for some products from "reciprocal tariffs," partially alleviating the previous tariff pressure. On the supply side, although operating capacity for aluminum increased in April, the domestic capacity ceiling limits significant growth. Coupled with the accelerating trend of aluminum ingot inventory destocking, this provides support for the bottom of aluminum prices. Cost side, the decline in spot alumina prices has led to a decrease in the comprehensive cost of aluminum. On the demand side, the market has a fear of falling prices under tariff impacts, but new orders from end-users increased slightly after the aluminum price decline, and processing enterprises' purchasing power rebounded, with inventory continuing to destock. Overall, the rebound in non-ferrous metals amid easing macro sentiment, coupled with continued aluminum inventory destocking, supports aluminum prices. In the short term, aluminum prices will maintain a fluctuating trend, and subsequent attention should be paid to tariff policy adjustments and the export situation of aluminum products and end-users.

【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.】