Dual-Track Fluctuations in the Aluminum Market: SHFE Aluminum Inventory Reduction Stands Firm on Quotes, Alumina Capacity Rebound Exerts Pressure [SMM Aluminum Futures Brief]

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SMM, April 18:

Today, the most-traded SHFE aluminum 2506 contract opened at 19,750 yuan/mt, with a high of 19,780 yuan/mt, a low of 19,655 yuan/mt, and closed at 19,695 yuan/mt, down 0.18%. The trading volume was 68,900 lots, and the open interest was 214,000 lots.

SMM Comment: On the macro front, as the European Central Bank continued to cut interest rates, the US dollar index stabilized, finally reporting 99.44, up 0.18%. During the week, Trump announced "US tariffs on certain Chinese goods increased to 245%", and China stated that the US has weaponized tariffs to an irrational extent, and China will not respond. It is evident that US tariff uncertainties persist, global trade barriers are increasing, and this may have a negative impact on China's export business in the short term. The domestic macro favorable atmosphere remains unchanged, promoting the recovery of domestic demand. On the fundamental side, domestic aluminum operating capacity remained stable, and the resumed capacity in Sichuan and Chongqing has fully resumed and achieved output. The cost side of the aluminum industry rebounded slightly during the week. As of Thursday this week, the domestic aluminum immediate full average cost was around 16,552 yuan/mt, down 18 yuan/mt WoW, mainly due to the continuous decline in alumina prices, with aluminum costs slightly down by 0.1%. On the demand side, the destocking of domestic aluminum ingot social inventory was significant, providing strong support for aluminum prices and spot premiums/discounts. According to SMM statistics, on April 18, the inventories in Guangdong, Wuxi, and Gongyi were 235,400 mt, 229,000 mt, and 91,000 mt, respectively, totaling 555,400 mt, down 10,400 mt from yesterday. The price drop stimulated downstream stocking sentiment. Entering mid-to-late April, the subsequent order volume in some aluminum processing sectors showed a downward trend compared to the previous peak season, mainly due to the end of the PV installation rush. Some companies reported that the operating rate may decline next week, coupled with the impact of overseas tariff uncertainties, some sectors saw a resurgence of overseas purchase wait-and-see sentiment, and subsequent export orders may be affected. Overall, on the macro side, the escalation of the tariff war has led to bearish sentiment. On the fundamental side, the destocking of domestic aluminum ingot inventory supports aluminum futures and spot premiums. In the short term, the operating rate of the aluminum processing sector in April remains high, but subsequent orders are expected to decline, and domestic aluminum prices are expected to fluctuate.

Today, the most-traded alumina 2509 contract opened at 2,872 yuan/mt, with a high of 2,880 yuan/mt, a low of 2,808 yuan/mt, and closed at 2,818 yuan/mt, down 1.85%. The trading volume was 247,000 lots, and the open interest was 206,000 lots.

SMM Comment: Due to the concentrated maintenance of alumina refineries in April, alumina operating capacity continued to decline. This week, alumina operating capacity fell to 82.88 million mt/year, and alumina supply tightened in the short term. This week, the decline in alumina prices slowed, and northern alumina prices rebounded slightly. However, as maintenance gradually ends and new capacities are put into operation, alumina operating capacity is expected to rebound, and the expectation of loose alumina supply remains. In the short term, alumina prices may enter a period of fluctuation and adjustment.

[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.]