7.27 SMM Aluminum Morning Meeting Minutes
Futures: The most-traded SHFE aluminum contract opened at 23,195 yuan/mt in the night session on July 24, with a high of 23,220 yuan/mt and a low of 23,105 yuan/mt, and closed at 23,205 yuan/mt, down 0.09% from the previous close. During this period, prices rebounded and then consolidated at highs, closing with a small bearish candlestick. Prices traded within the short-term clustered moving-average range of MA5 (23,232.43), MA10 (23,220.90), MA20 (23,186.42), and MA40 (23,221.95). The moving-average system formed bottom support, with overhead pressure only from the MA60 (23,345.74) medium and long-term moving average. Support at the phase low of 22,875 remained solid, and the post-rebound consolidation feature was evident. Trading volume in this period was 50,900 lots, shrinking significantly from the previous period. Open interest was 253,000 lots, edging up 445 lots from the previous period. Futures showed signs of a slight increase in bearish positions, but fund strength was relatively weak. From a technical perspective, on the 4-hour MACD, DIFF (28.68) was above DEA (17.47), with the golden-cross structure continuing. The red histogram STICK value was 22.42; bullish momentum narrowed slightly, but the trend did not reverse. LME aluminum opened at $3,189.0/mt on July 24, with a high of $3,189.5/mt and a low of $3,149.5/mt, and closed at $3,165.0/mt, down 0.78% from the previous close. During this trading day, prices rebounded to highs and then pulled back under pressure, closing with a small bearish candlestick. Prices fell back below the short-term moving averages MA5 (3,173.21) and MA10 (3,168.82). Overhead, the MA20 (3,187.07), MA40 (3,262.70), and MA60 (3,305.75) medium and long-term moving averages were in a bearish alignment, forming resistance. Support at the phase low of 3,040 remained solid, and the market entered a post-rebound consolidation and adjustment phase. Trading volume that day was 13,383 lots, shrinking slightly from the previous period. Open interest was 593,000 lots, up 2,140 lots from the previous period. Futures showed signs of a slight increase in bearish positions, and bearish pressure was relatively weak. From a technical perspective, on the daily MACD, DIFF (-44.58) was above DEA (-63.23), with the golden-cross structure continuing. The red histogram STICK value was 37.3; bullish momentum weakened marginally but did not reverse. In the short term, the market was mainly consolidating at highs with a pullback, and the risk of a one-way downside move was limited.
Macro front: Foreign Ministry spokesperson Lin Jian, presiding over a regular press conference, said that China’s position on China-US economic and trade issues is consistent and clear, and that it opposes unilateral tariff measures in any form; tariff wars and trade wars do not serve the interests of any party. According to CME “FedWatch”: the probability that the US Fed would keep rates unchanged in July was 62.1%, and the probability of a cumulative 25-basis-point hike was 37.9%. The probability that the US Fed would keep rates unchanged through September was 15.1%; the probability of a cumulative 25-basis-point hike was 56.2%, and the probability of a cumulative 50-basis-point hike was 28.7%.
Fundamentals: Last week, the spot aluminum ingot market outside China in Asia fell under pressure overall, and the average spot transaction prices in Asia’s mainstream trading regions pulled back sharply WoW. Downstream industries entered the traditional consumption off-season, with purchasing willingness remaining sluggish; coupled with inventory overhang among some traders and mounting funding pressure, low-price selling increased, market quotation divergence widened markedly, and the spot price center continued to loosen. In the short term, there were still no signs of improvement in the off-season pattern for downstream Asia, end-user just-in-time procurement was unlikely to scale up, and with traders’ inventory-clearing cycle still in place, overseas spot premiums for aluminum ingot may remain in the doldrums. Going forward, continued attention should be paid to the pace of downstream recovery, new signings of additional long-term contract orders, and traders’ inventory drawdown progress. If demand stays weak, regional spot prices still have room to move further down. On inventory, as of Monday this week, aluminum ingot inventory in China’s mainstream consumption regions stood at 979,000 mt, down 27,000 mt from last Thursday and down 43,000 mt from last Monday.
Primary aluminum market: In early trading, the center of SHFE aluminum 2606 contract trading was below the level at the same time of the previous trading day. Affected by weekend stockpiling and the decline in aluminum prices, market purchasing sentiment rose somewhat, but with circulating supply still relatively ample, market price acceptance only edged up slightly. Mainstream transaction prices were at a discount of 10 yuan/mt to a premium of 10 yuan/mt against the SHFE aluminum 08 contract. Today, the shipment sentiment index in the east China market was 3.13, flat WoW; the purchasing sentiment index was 2.94, up 0.03 WoW. Today, aluminum futures pulled back slightly. With stockpiling ahead of the weekend and the last long-term contract delivery day at month-end, traders in central China made large purchases to deliver against long-term contracts, and downstream processing enterprises’ stockpiling sentiment recovered slightly, keeping suppliers’ shipment offers high throughout, with a pronounced willingness to hold prices firm and hold back from selling. Ultimately, the actual transaction price range in the central China market hovered at a discount of 100-120 yuan/mt against the SHFE aluminum 08 contract. Today, the shipment sentiment index in the central China market was 3.1, up 0.01 WoW; the purchasing sentiment index was 2.96, up 0.08 WoW.
Aluminum scrap: Today, SMM A00 spot aluminum prices closed at 23,200 yuan/mt, down 60 yuan/mt from the previous trading day, while the aluminum scrap market held steady overall. For the price difference between A00 aluminum and aluminum scrap, as of July 24, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was about 2,030 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap was about 710 yuan/mt, continuing to stay at a historically extremely low level. On imports, customs data showed that China’s aluminum scrap imports totaled about 132,800 mt in June 2026, down for a third consecutive month from 152,000 mt in May. From cumulative data in 2026, total aluminum scrap imports from January to June were about 981,800 mt. Recently, import orders into Guangdong from Southeast Asia increased somewhat. Although the import window improved versus earlier, most new deals were concentrated in low-priced resources, and overall spot market activity remained limited. Affected by the UAE’s aluminum scrap export ban and the EU’s tariff hike policy, the tightening effect on high-quality imported aluminum scrap supply is expected to become more evident in the future. The aluminum scrap market is expected to continue a move-sideways pattern next week, with demand capping prices while costs provide support. Against the backdrop of a deepening off-season, downstream end-use orders are unlikely to see any substantive improvement. Scrap utilization enterprises will continue purchasing as needed, and the procurement atmosphere is unlikely to improve significantly. The mainstream trading range for shredded aluminum tense scrap (priced based on aluminum content) is expected to hover between 19,800 and 20,500 yuan/mt. At present, the price difference between A00 aluminum and aluminum scrap has narrowed to a historical low, significantly weakening aluminum scrap’s economic advantage relative to primary aluminum. If primary aluminum prices continue to pull back, the substitution effect of primary aluminum replacing aluminum scrap will accelerate. Close attention should be paid to the crowding-out effect of aluminum price movements on aluminum scrap demand.
Secondary Aluminum Alloy:Spot: Today, ADC12 market quotations generally remained stable, and the industry’s willingness to adjust prices was broadly insufficient. In terms of driving factors, while the cost side provided some bottom support for prices, end-use demand remained weak, downstream procurement pace slowed down, and wait-and-see sentiment intensified due to a slight pullback in aluminum prices, jointly suppressing upside room. Under the current mixed bullish-and-bearish pattern, most producers chose to hold prices steady and wait on the sidelines, and market trading was relatively sluggish. In the short term, the ADC12 market is expected to continue consolidating within a narrow range. Going forward, key attention should be paid to changes in aluminum scrap costs, primary aluminum price trends, and improvements in end-use orders.
Overall Outlook:Recently, sentiment on the macro front improved slightly. The continued buildup of Middle East geopolitical risk premiums, together with continued destocking of aluminum ingot in China, jointly provided support for aluminum prices; however, the continued commissioning of forward aluminum capacity outside China and relatively weak traditional end-use demand in China, coupled with recurring macro-level uncertainties, have created clear pressure on upside room. In the short term, aluminum prices are expected to maintain a consolidation pattern.
[The information provided is for reference only. This article does not constitute direct advice for investment research decision-making. Clients should make decisions prudently and should not use this as a substitute for independent judgment. Any decisions made by clients are unrelated to SMM.]
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