2.12 SMM Morning Meeting Minutes
Futures:SHFE aluminum closed at 23,555 yuan/mt in the night session, down 0.08%, with prices consolidating narrowly. It is currently above the MA5 (23,517) but suppressed by the MA10 (23,633), with short-term moving averages still in a bearish alignment; medium to long-term, it stands firmly above the MA60 (23,038.42), with the bottom support intact. The MACD indicator shows the DIF (2.9912) and DEA (152.2313) maintaining a death cross, with the histogram deeply negative at -298.4803, indicating strong bearish momentum. The core trading range for SHFE aluminum is suggested at 23,300-23,800. LME aluminum closed at $3,117/mt in the night session, up 0.39%. The price is above the MA5 (3,097.60) and MA10 (3,107.15) but under pressure from the MA30 (3,129.87), with short-term moving average resistance remaining; medium to long-term, it operates above the MA60 (3,003.46), showing a relatively stable trend structure. The MACD indicator shows the death cross between DIF (11.3522) and DEA (24.6329) converging, with the negative histogram narrowing to -26.5615, indicating weakening downward momentum. The core trading range for LME aluminum is suggested at 3,090-3,140.
Macro Front:Data released by the National Bureau of Statistics (NBS) showed that in January, China's CPI rose 0.2% MoM and 0.2% YoY, while core CPI increased 0.8% YoY; PPI rose 0.4% MoM, marking the fourth consecutive monthly increase, with the growth rate expanding by 0.2 percentage points from the previous month, but fell 1.4% YoY, with the decline narrowing by 0.5 percentage points from the previous month. The released CPI and PPI data use 2025 as the base period, representing the first data release after this base period rotation. The NBS pointed out that this base period rotation had an average impact of approximately 0.06 and 0.08 percentage points on the monthly YoY indices of CPI and PPI, respectively, which is relatively small overall. (Bullish ★) US seasonally adjusted non-farm payrolls increased by 130,000 in January, far exceeding market expectations of 70,000, while the previous figure was slightly revised down to 48,000. The unemployment rate recorded 4.3%, the lowest since August 2025; average hourly earnings grew 0.4% MoM, exceeding expectations. Kansas City Fed President Schmid stated that inflation remains above target levels and a "slightly restrictive" interest rate stance should be maintained. Traders delayed their bets on a US Fed interest rate cut from June to July. US President Trump praised the strong January non-farm payrolls performance in a post, again calling for significant interest rate cuts, stating that the US should enjoy the world's lowest interest rates. (Bullish ★)
Fundamentals:Supply side, the ramp-up of new aluminum projects domestically and overseas is pushing up daily average production. Demand side, on the production front, as the Chinese New Year holiday approaches, downstream processing enterprises have begun holidays successively, leading to a decline in operating rates and weakening demand; the proportion of liquid aluminum decreased by 8.6 percentage points WoW last week. On the trading front, after the absolute price of aluminum declined, traders' bullish sentiment supported increased procurement, spot discounts narrowed, and transactions showed slight signs of recovery. However, the trend of social inventory buildup remained unchanged, with Thursday's inventory increasing by 35,000 mt compared to Monday. Inventory pressure gradually rose, and the post-Chinese New Year holiday social inventory peak is expected to hit a new high in nearly three years.
Primary Aluminum Market: In early trading, the SHFE aluminum 2602 contract fluctuated with slight gains, though the price center edged lower compared to the previous trading day. Affected by the approaching Chinese New Year, overall market sentiment was weak, with mainstream transactions concentrated at the average price to a premium of 10 yuan/mt. On Wednesday, the east China market shipment sentiment index was 2.3, down 0.4 WoW; the purchasing sentiment index was 2.29, down 0.21 WoW. SMM A00 aluminum was quoted at 23,260 yuan/mt, down 30 yuan/mt from the previous trading day, at a discount of 190 yuan/mt against the 2602 contract, flat from the previous day. Wednesday's central China market transactions remained sluggish. As the Chinese New Year approached, pre-holiday stockpiling by downstream processing enterprises had largely ended, with only minimal just-in-time procurement. Major suppliers also gradually entered the Chinese New Year holiday, leading to scarce spot supply in the market. However, some traders bought the dip and stockpiled, driving transaction prices higher from a premium of 10 yuan/mt to the central China price before opening to a premium of 50 yuan/mt. The main transaction range was between a premium of 10 yuan/mt and 30 yuan/mt to the central China price. Wednesday's central China market shipment sentiment index was 2.56, down 0.16 WoW; the purchasing sentiment index was 2.14, down 0.02 WoW. SMM central China price closed at 23,160 yuan/mt, down 10 yuan/mt from the previous trading day, at a discount of 290 yuan/mt against the 2602 contract, up 20 yuan/mt from the previous day. The Henan-Shanghai price spread was -100 yuan/mt, narrowing by 20 yuan/mt from the previous day.
Secondary Aluminum Raw Materials: On Wednesday, spot primary aluminum prices edged down slightly compared to the previous trading day, with SMM A00 spot closing at 23,260 yuan/mt. Aluminum scrap prices held steady overall on Wednesday. Baled UBC was mainly offered at 16,800-17,250 yuan/mt (ex-tax), while shredded aluminum tense scrap (priced based on aluminum content) was mainly offered at 19,000-19,700 yuan/mt (ex-tax). In terms of the price difference between A00 aluminum and aluminum scrap, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was 3,523 yuan/mt on February 11, and the price difference between A00 aluminum and shredded aluminum tense scrap was 2,716 yuan/mt. Recently, directly impacted by recycling policies and forced to follow higher aluminum prices, the market has shown a situation of "nominal prices without actual transactions." Scrap utilization enterprises in related provinces were forced to reduce or halt production, and downstream buying sentiment was dampened, leading to purchasing as needed. Aluminum scrap prices are expected to hover at highs this week, with shredded aluminum tense scrap (priced based on aluminum content) mainly trading in the range of 19,000-19,800 yuan/mt (ex-tax). Before the holiday, repeated environmental protection-related controls in Anhui, Henan, Hebei, and other regions, combined with high aluminum prices, provided bottom support for aluminum scrap prices. Suppressed demand forced scrap utilization enterprises and aluminum scrap yards to enter the holiday early, making it difficult to change the "nominal prices without actual transactions" pattern, and the overall tug-of-war between sellers and buyers continued. It is essential to closely monitor the shutdown and production resumption of downstream processing enterprises, as well as the progress of environmental protection enforcement in various regions, and remain vigilant against the risk of continued sluggish trading in the aluminum scrap market following another aluminum price correction.
Secondary Aluminum Alloy:Futures side, the most-traded A2604 futures contract showed a pattern of falling first and then rising during the day. After hitting a bottom of 22,080 yuan/mt in the morning session, it gradually rebounded and fluctuated at highs in the afternoon before closing at 22,205 yuan/mt, up 70 yuan/mt or 0.32% from the previous close, with bulls mainly increasing their positions. This reflects a technical recovery after the previous sharp decline, but the overall trend has not yet reversed. Spot market side, A00 aluminum price edged down 30 yuan/mt from the previous trading day to 23,260 yuan/mt, while the SMM ADC12 price held steady at 23,650 yuan/mt. As the Chinese New Year approaches, enterprises across the secondary aluminum industry chain are entering a concentrated holiday period, leading to a noticeable decline in market liquidity. Actual transactions remain sluggish, and spot quotations are mostly adjusted slightly in line with futures movements. Supply side, secondary aluminum enterprises are gradually halting production, with most furnace shutdowns scheduled between February 5 and 13. Production resumptions are mostly planned around the eighth day of the first lunar month or the Lantern Festival. The shutdown period is expected to last 8–20 days, generally longer YoY. Against the backdrop of unchanged demand, fundamental support for prices continues to weaken. The price center for secondary aluminum alloy is slowly shifting downward before the holiday, and in the short term, prices are expected to remain in the doldrums with limited upside.
Aluminum Market Summary:Macro front, domestic January CPI and PPI data indicated a mild rebound in price levels. PPI rose for the fourth consecutive month MoM, and the YoY decline narrowed, reflecting marginal improvement in industrial demand and providing macro support for base metals such as aluminum. US non-farm payrolls far exceeded expectations, demonstrating strong economic resilience. Although expectations for interest rate cuts have been delayed, market concerns about growth prospects have eased, and Trump has again called for significant rate cuts, boosting overall macro sentiment. However, fundamentals are facing typical seasonal weakening pressures. Supply side, newly commissioned aluminum projects domestically and overseas continue to ramp up production, with daily average production maintaining an upward trend, sustaining supply pressure. Demand side has entered the pre-holiday off-season, as downstream processing enterprises gradually shut down for the holiday, leading to a decline in operating rates and noticeably weaker consumption from the production side. The current aluminum ingot inventory buildup is accelerating, and the market expects post-holiday inventory peaks to hit multi-year highs. Visible inventory pressure is gradually becoming a key real-world factor weighing on aluminum prices. In summary, aluminum prices are expected to remain under pressure in the short term, capped by inventory buildup realities but supported by macro expectations. Prices are likely to stay in the doldrums with limited room for rebound.
[The information provided is for reference only. This article does not constitute direct advice for investment research decisions. Clients should make decisions prudently and not use it to replace their own independent judgment. Any decisions made by clients are unrelated to SMM.】
