Macro-Micro Divergence, SHFE Aluminum Consolidates [Institutional Commentary]

Last week, alumina futures fluctuated upward, with the most-traded contract closing at 2,818 yuan/mt on the 18th, up 0.5% WoW. SHFE aluminum consolidated, with the most-traded contract closing at 19,695 yuan/mt on the 18th, and the % change remained stable WoW.

1. Supply: According to SMM, the operating rate of alumina dropped 1.85% WoW to 78.92%, as Shandong and Shanxi continued centralized maintenance, and Henan saw new maintenance. For aluminum, the resumption progress in Sichuan, Guangxi, and Qinghai was basically completed. SMM estimates that domestic metallurgical-grade alumina operating capacity will drop to 82.88 million mt in April, with production at 7.17 million mt, down 5% MoM but up 7.4% YoY. Domestic aluminum operating capacity will increase to 43.9 million mt in April, with production at 3.57 million mt, down 3.2% MoM but up 1.6% YoY. The liquid aluminum ratio dropped back slightly to 73%.

2. Demand: While wire and cable showed strong performance, other sectors remained weak, and the overall operating rate stopped declining and rebounded. The operating rate of processing enterprises rose 0.2% WoW to 62.4%. Among them, the operating rate of aluminum extrusion remained stable at 58.5%, aluminum wire and cable rose 3% WoW to 63.6%, aluminum plate/sheet and strip fell 0.6% WoW to 68%, and aluminum foil remained stable at 73%. Aluminum billet processing fees varied, with Henan remaining stable, Xinjiang, Baotou, Wuxi, and Guangdong down 60-120 yuan/mt, and Linyi up 20 yuan/mt. Aluminum rod processing fees remained stable in Henan but rose 50 yuan/mt in other regions.

3. Inventory: For exchange inventories, alumina saw a weekly buildup of 9,005 mt to 244,000 mt; SHFE aluminum destocked 15,000 mt WoW to 190,500 mt; LME destocked 12,000 mt WoW to 434,000 mt. For social inventories, alumina saw a weekly buildup of 7,200 mt to 3.47 mt; aluminum ingots destocked 55,000 mt WoW to 689,000 mt; aluminum billets destocked 25,900 mt WoW to 209,200 mt.

4. View: The scale of alumina maintenance expanded, but the duration continued to shorten, offering little help to the surplus situation. It is expected to continue fluctuating, with range trading and shorting far-month contracts as the main strategies, focusing on cost support and marginal increment competition. Under factors such as blocked shipments in Xinjiang and downstream buying the dip and restocking, the weekly destocking volume of aluminum ingots hit a yearly high, but as the peak season nears its end, the destocking rate is expected to decline. Entering the tariff policy adjustment phase, overseas sentiment remains cautious, and new orders are expected to continue declining. Macro and micro sentiment diverged, and aluminum prices entered a consolidation mode. It is recommended to focus on range trading, paying attention to policy changes and inventory trends for short-term direction guidance.