Domestic and overseas factors are complex, and aluminum prices are unlikely to be volatile in the short term [[SMM Morning Aluminum Meeting Summary]]

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4.30 SMM Aluminum Morning Meeting Summary

Futures: In the previous night session, the most-traded SHFE aluminum 2506 contract opened at 19,990 yuan/mt, with a high of 20,055 yuan/mt and a low of 19,980 yuan/mt, closing at 20,040 yuan/mt, up 110 yuan/mt or 0.55% from the previous close. LME aluminum opened at $2,435.5/mt, with a high of $2,471/mt and a low of $2,429/mt, closing at $2,470/mt, up $34.5/mt or 1.42%.

Macro: (1) The monthly data released by the US Bureau of Labor Statistics on Tuesday showed that the number of job openings in March fell to 7.19 million from the revised 7.48 million in February, below the expectations of all economists surveyed. (Bearish★) (2) The Conference Board's data showed that the Consumer Confidence Index fell 7.9 points to 86.0 in April, the lowest level since May 2020. (Bearish★) (3) The US goods trade deficit widened to a record $162 billion in March, compared with an estimate of $145 billion and a deficit of $147.9 billion in February. (Bearish★)

Fundamentals: (1) From March to April 2025, alumina enterprises gradually began to face losses, and many alumina enterprises chose to conduct maintenance. From late March to April, SMM learned that a cumulative capacity of around 11.5 million mt underwent maintenance; meanwhile, some alumina enterprises reported plans for maintenance in May. (Bullish★) (2) SMM learned that the tender price for prebaked anode at a large aluminum plant in Shandong fell 266 yuan/mt MoM in May, with the spot price for prebaked anode in May 2025 at 4,939 yuan/mt and the acceptance price at 4,963 yuan/mt. (Bearish★) (3) On April 29, LME aluminum inventory recorded 417,600 mt, down 2,000 mt or 0.48% from the previous day; over the past week, LME aluminum inventory decreased by 14,100 mt or 3.27%; over the past month, LME aluminum inventory decreased by 48,500 mt or 10.40%. (Bullish★) (4) The composite PMI for the aluminum processing industry in April recorded 51.6%, although above the 50 mark, it fell 5 percentage points MoM, with expansion momentum significantly weaker than the same period last year. (Bearish★)

Primary aluminum market: On Tuesday, SHFE aluminum fluctuated in the early session, with a significant pullback before fluctuating, and the futures market quickly surged to around 20,000 yuan/mt near 10 am. In the spot market, east China and central China showed different performance on Tuesday. Specifically, spot supply in east China was relatively sufficient, and downstream restocking sentiment slowed slightly due to rising aluminum prices, making it difficult to achieve premiums. Early market transactions on SMM were at -10 to the average price. SMM A00 aluminum was quoted at 20,020 yuan/mt, up 70 yuan/mt from the previous day, at parity with the 05 contract, unchanged from the previous day. In the central China market, after the market discount widened earlier, hedging traders were relatively active in purchasing, coupled with downstream pre-holiday restocking demand, market premiums gradually improved. With several days of stockpiling, inventory in central China continued to decline, and spot supply tightened during the day. Suppliers took the opportunity to push premiums, and market activity was moderate. SMM central China A00 against the SHFE aluminum 2505 contract recorded 19,960 yuan/mt, up 90 yuan/mt from the previous day, with the Henan-Shanghai price spread at -60 yuan/mt, narrowing 20 yuan/mt from the previous day. Actual market transactions were at a premium of 10-20 yuan/mt against the SMM central China price and a discount of 60 yuan/mt against the 2505 contract.

Secondary aluminum raw materials: On Tuesday, spot primary aluminum rose 70 yuan/mt from the previous day, with SMM A00 spot closing at 20,020 yuan/mt. Aluminum scrap prices generally followed primary aluminum's adjustment. As the traditional "golden March and silver April" peak season nears its end, new orders from end-users were weak, and downstream processing enterprises' risk aversion sentiment intensified, maintaining raw material purchasing as needed. On Tuesday, baled UBC scrap was quoted at 15,050-15,650 yuan/mt (excluding tax), and shredded aluminum tense scrap was quoted at 15,750-17,250 yuan/mt (excluding tax). By product, supply of bare bright aluminum wire and shredded wrought aluminum alloy scrap remained tight, with price adjustments of 50-100 yuan/mt. In the short term, the aluminum scrap market is likely to hover at highs, but if primary aluminum experiences strong fluctuations due to macro factors (such as US Fed policies or geopolitical conflicts) or domestic secondary aluminum enterprises collectively cut production, aluminum scrap prices may face periodic pressure.

Secondary aluminum alloy: On Tuesday, aluminum prices slightly rebounded, with SMM ADC12 prices steady in the range of 20,400-20,600 yuan/mt. Dragged by persistently weak demand, the secondary aluminum market continued its "more likely to fall than rise" trend, and secondary aluminum plants' offers were generally steady. As the Labour Day holiday approaches, downstream enterprises only conducted limited pre-holiday restocking, and overall market transactions improved marginally. Secondary aluminum alloy prices are expected to remain weak in the short term, with recent focus on pre-holiday stockpiling and the impact of tariff hikes on downstream orders.

Summary: From a macro perspective, a series of domestic policies have played a positive role in stabilizing the real estate market, and the domestic macro bullish sentiment remains unchanged; in overseas markets, Trump's policy stance has been unpredictable, and there are still many uncertainties from attitude to policy implementation. Fundamentally, the cost side of the aluminum industry remains stable, while the demand side shows signs of structural recovery, benefiting from the continuous introduction of new orders in May, driving pre-holiday restocking demand for raw materials such as aluminum ingots and billets. Domestic aluminum ingot inventory reduction supports aluminum prices, but suppliers are actively selling at highs, and spot premiums have pulled back. Overall, whether China-US trade can achieve substantive easing remains to be seen, and short-term long-short contradictions are still evident. As the transition between peak and off-peak seasons approaches and the PV installation rush nears its end, downstream aluminum orders are expected to decline, and aluminum prices lack strong upward momentum. Domestic aluminum prices are expected to fluctuate before the holiday.

[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.]