4.23 SMM Morning Meeting Minutes
Futures:The most-traded SHFE aluminum 2606 contract closed at 25,150 yuan/mt, up 0.60%. The price returned to near MA5 (25,151) and stood above MA10 (25,079), MA30 (24,726.33), and MA60 (24,515.17), stabilizing after a short-term correction. The MACD indicator DIF (191.14) and DEA (174.09) maintained a golden cross, with the histogram rebounding to 34.1, indicating some recovery in bullish momentum. The suggested core trading range for SHFE aluminum is 24,900-25,400. LME aluminum closed at $3,627/mt in the daytime session, up slightly by 0.14%. The price traded above MA5 (3,574.5) and MA10 (3,585.9), with the moving average system maintaining a bullish alignment. The MACD indicator DIF (77.78) and DEA (75.82) formed a golden cross, but the histogram was only 3.91, indicating relatively weak upward momentum. The suggested core trading range for LME aluminum is 3,580-3,650.
Macro Front:US President Trump stated that a new round of US-Iran peace talks could see progress "as early as Friday." Iran's Islamic Parliament Speaker and chief negotiator Kalibaf emphasized that reopening the Strait of Hormuz was impossible while the US openly violated the ceasefire agreement.
Fundamentals:Supply side, affected by large-scale production cuts at Middle Eastern aluminum smelters, the ex-China aluminum fundamentals showed a notable supply gap; price trends showed LME aluminum outperforming SHFE aluminum, with the SHFE/LME price ratio declining and import losses widening. China's net primary aluminum imports were expected to decrease, but as domestic operating aluminum capacity stayed high, the supply-side fundamentals had not yet shown a significant gap. Demand side, affected by reduced aluminum supply, surging energy costs, and tight oil supply, some overseas downstream processors cut or suspended production; domestically, as the peak season deepened, downstream operating rates rebounded, coupled with incremental export orders for some aluminum products, demand performance was moderate. However, aluminum billet processing fees performed weakly, with some billet plants cutting production, and the overall aluminum billet operating rate rebound fell short of expectations. Overall, the weekly liquid aluminum operating rate declined by 0.08 percentage points last week. Nationwide aluminum ingot social inventory as of Thursday increased by 12,000 mt compared to Monday, of which the Gongyi area saw an inventory buildup of 10,000 mt WoW. When the social inventory inflection point will arrive deserves attention.
Primary Aluminum Market:Yesterday morning, the SHFE aluminum 2605 contract fluctuated upward. End-users mainly made just-in-time procurement, with some buyers stockpiling ahead of the holiday. Mainstream transactions were concentrated around the SMM A00 aluminum average price to +10 yuan/mt. Yesterday, the east China market shipments sentiment index was 3.36, flat WoW; the purchase sentiment index was 3.21, up 0.05 WoW. Recently, SHFE aluminum fell for consecutive days. Premiums in the central China market showed an upward trend, and buying sentiment among downstream processing enterprises recovered slightly. Ahead of the Labour Day holiday, some traders began early staggered stockpiling to avoid sharp pre-holiday price increases, boosting overall trading volume in the market. Additionally, affected by invoicing quota limits, cargoes with invoices dated this month were in tight supply, and some traders started selling cargoes with invoices dated next month in advance, indirectly driving up premiums for this month's available cargoes. Ultimately, the actual transaction price range in the central China market hovered between a premium of 10 yuan and a premium of 25 yuan over the central China price. Yesterday, the shipment sentiment index in the central China market was 2.83, flat MoM; the procurement sentiment index was 2.39, up 0.03 MoM.
Aluminum scrap: Yesterday, spot primary aluminum rose 100 yuan/mt from the previous trading day, while aluminum scrap market prices remained generally stable. Supply side, regulatory enforcement of the "reverse invoicing" policy continued to tighten, compliance costs in the aluminum scrap recycling process remained elevated, and actually available cargoes with invoices remained tight. Yards held back from selling with strong price-holding sentiment. Some regional traders adopted a wait-and-see approach on high-priced cargoes, leading to low actual circulation volumes in the market. Demand side, peak-season demand during the "Golden March and Silver April" period was lackluster. Downstream aluminum tense scrap-based scrap utilization enterprises continued to maintain strategies of purchasing as needed and running low inventory, with limited willingness to accept high-priced resources, and overall procurement pace remained conservative. Wrought aluminum alloy scrap-based enterprises were in their production peak season with relatively higher stockpiling enthusiasm, but price support remained limited. Regarding 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 recorded at 2,748 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap was 1,888 yuan/mt. On aluminum scrap imports, according to the latest data released by China's General Administration of Customs, in March 2026, China's aluminum scrap imports were approximately 197,300 mt, up 44.75% MoM significantly and up 7.57% YoY. Cumulative aluminum scrap imports from January to March 2026 totaled 526,300 mt, up 3.9% YoY. However, the current high aluminum price landscape is difficult to reverse in the short term, and import traders generally held cautious and pessimistic attitudes on the procurement side, with aluminum scrap imports expected to pull back notably going forward. Aluminum scrap market is expected to continue holding up well at high levels this week, with the mainstream price range for shredded aluminum tense scrap (priced based on aluminum content) expected to hover around 21,000-21,500 (tax-exclusive). Supply-side policy constraints are unlikely to ease in the short term, and the tight supply of compliant cargoes is expected to persist. The Strait of Hormuz transit risk triggered by the US-Iran conflict has not fully subsided, and high aluminum prices along with yards' reluctance to sell provide price floor support. However, demand-side peak-season recovery fell below expectations, with downstream scrap utilization enterprises generally maintaining low inventory and purchasing-as-needed strategies, and high prices suppressed overall transactions. In the short term, continued attention should be paid to the actual impact of the US-Iran conflict on aluminum price fluctuations and the recovery expectations for end-user orders, with vigilance against the risk of aluminum prices retreating after rapid rise.
Secondary Aluminum Alloy:Spot side, the ADC12 market overall continued its stable pricing pattern yesterday. Insufficient support from the demand side led to mediocre trading activity, and upward momentum for prices was clearly limited. Meanwhile, as the Labour Day holiday approached, downstream enterprises slowed the pace of order release, with some enterprises considering early production cuts or holiday arrangements, further suppressing short-term demand performance. Against this backdrop, most enterprises opted to hold prices steady and take a wait-and-see approach. The short-term market is expected to continue to move sideways and remain in the doldrums, with limited upside room for prices.
Aluminum Market Summary:Macro front, the prospects for US-Iran negotiations remained uncertain: Trump sent an optimistic signal that "progress could be made as early as Friday," but Iran took a hardline stance, stating that it would be impossible to reopen the Strait of Hormuz given the US violation of the ceasefire agreement. The strait blockade persisted, and the disruption of this critical shipping lane would directly impact global energy and material transportation. Geopolitical risk premiums stayed high, providing sustained support for aluminum prices. Ex-China, large-scale production cuts at Middle Eastern aluminum smelters widened the supply gap. LME aluminum rose sharply, the SHFE/LME price ratio declined, and import losses widened. China's net primary aluminum imports are expected to decrease, strengthening the transmission support from LME to SHFE aluminum. China's demand side, the rebound in downstream operating rates during the peak season, combined with incremental export orders, showed moderate performance. However, weak aluminum billet processing fees led to production cuts at some enterprises, and the weekly operating rate of liquid aluminum edged down by 0.08 percentage points, indicating that the domestic consumption recovery was not broadly robust. Overall, the strait blockade persisted, and the ex-China supply gap along with continued LME inventory drawdowns supported LME prices to hold up well. Meanwhile, China's aluminum ingot inventory remained at high levels, and attention should be paid to whether the inflection point in domestic inventory can materialize smoothly.
[The information provided is for reference only. This article does not constitute direct advice for investment research decisions. Clients should make prudent decisions and not replace independent judgment with this information. Any decisions made by clients are not related to SMM.]
