8.25 SMM Aluminum Morning Meeting Summary
Futures: The most-traded SHFE aluminum 2610 contract closed at 23,815 yuan/mt, up 30 yuan from yesterday's settlement price, an increase of 0.13%. It opened at 23,790.00 yuan/mt during the session, fluctuating in a range of 23,780-23,940 yuan/mt. Prices traded above MA5 (23,712.00) and MA60 (23,624.75), and above the MA10 (23,881.00) and MA30 (23,633.50) moving averages. The medium and long-term moving averages showed a bearish arrangement, continuing to press down, forming a retreat-from-highs consolidation structure, with the 10-day moving average serving as a key resistance level above. The MACD indicator showed DIF (76.4894) below DEA (114.9911), with the MACD green bar at -77.0035, indicating that the momentum of bulls continued to weaken. The core trading range for SHFE aluminum is suggested to be 23,400-24,100 yuan/mt. LME aluminum 3M contract closed at $3,218.50/mt, up 0.19%, opening at $3,215.00/mt during the session, fluctuating in a range of $3,215.00-$3,222.50/mt. Prices traded above MA5 ($3,219.40) and MA30 ($3,217.43), and below the MA10 ($3,237.05) and MA60 ($3,264.45) moving averages. The medium and long-term moving averages showed a bearish arrangement, gradually pressing down, forming an overall retreat-from-highs consolidation and correction structure, with the 10-day and 60-day moving averages providing clear resistance. The MACD indicator showed DIF (-0.9795) below DEA (3.8149), with the MACD green bar at -9.5887, indicating that the momentum of bulls weakened. The core trading range for LME aluminum is suggested to be $3,180-$3,300/mt.
Macro front: US Treasury Secretary Bessent announced a series of economic sanction measures against Iran to further increase pressure on Iran. The US will expand the scope of secondary sanctions on countries with commercial dealings with Iran and urge relevant countries to make a choice. Iranian Parliament Speaker Qalibaf said that Iran's trading partners have stated they will "not take seriously" the relevant US sanctions rhetoric. In response to "US threats of secondary sanctions on Iran's trading partners," the Ministry of Foreign Affairs stated that sanctions and pressure do not help solve problems, only escalate tensions and worsen the situation, which does not serve the interests of any party. China calls on all parties to remain rational and restrained, avoid actions that may further intensify conflicts and impact global economic development and financial stability, and return to the correct track of dialogue, negotiation, and political resolution as soon as possible. The PBOC announced that on August 24, it conducted a 7-day reverse repo operation of 340 billion yuan via a fixed rate and quantity tender, fully meeting the demand of primary dealers, with an operating rate of 1.40%, a bid volume of 340 billion yuan, and an award volume of 340 billion yuan.
Fundamentals: On the supply side, China's weekly aluminum production was stable last week, with the proportion of liquid aluminum pulling back slightly by 0.02 percentage points. Outside China, driven by new investments and production resumptions, daily average production is expected to continue to rebound. Demand side, the traditional consumption off-season is nearing its end, but the transition period between off-season and peak season has yet to appear, with operating rates of downstream processing sectors under pressure overall. Inventory side, the destocking trend of aluminum ingot social inventory continued. This Monday, domestic mainstream consumption region electrolytic aluminum ingot inventory stood at 860,000 mt, down 15,000 mt WoW from last Thursday, and down 26,000 mt WoW from last Monday.
Primary Aluminum Market: The SHFE aluminum 2609 contract futures rose from the previous trading day, and downstream buying sentiment diminished somewhat. Trading sentiment among market traders was not active, and overall spot premiums transaction remained unchanged from the previous trading day. SHFE aluminum 09 contract discount of 10 yuan/mt to premium of 10 yuan/mt. Today, trading atmosphere in central China market weakened WoW from last Friday. As aluminum futures rose, downstream processing enterprises' buying sentiment was low, and overall trading volume was weak. Moreover, market quotations showed a continuous downward trend after market opening, and suppliers' willingness to hold prices firm was also low. Ultimately, actual transaction prices in central China market were centered around a discount of 40-70 yuan/mt to the SHFE aluminum 09 contract. Today, futures continued to rise, while spot in South China moved in the doldrums. Arrivals increased MoM but have not yet translated into actual inventory buildup. Low absolute inventory still provides some support for sellers. Most holders chose to control prices and release slowly, with only a few making small concessions. Mainstream quotations were at a discount of -10 to 0 yuan/mt, with cargo flow generally under control. Demand side, downstream acceptance of rising prices was weak, with insufficient momentum to rush to buy, and rigid purchasing as needed remained the main theme. Traders' just-in-time procurement was moderate, with strong willingness to accept non-premium invoices, but overall elastic demand was scarce. Both bulls and bears were cautious, with supply and demand in a tug-of-war, and intraday trading was lukewarm. Spot transaction prices were concentrated at a premium of 135-175 yuan/mt to the SHFE aluminum 2609 contract.
Aluminum Scrap: Today, SMM A00 spot aluminum price closed at 23,800 yuan/mt, up 120 yuan/mt from the previous trading day. Domestic aluminum scrap market prices were generally stable on wait-and-see, with a slight upward follow-through. Against the backdrop of continuously rising primary aluminum prices, aluminum scrap price fluctuations were relatively limited, and the price transmission mechanism was obstructed. However, with the recent pullback in primary aluminum, the resilience of aluminum scrap prices provided an opportunity for the narrowing of the price difference between A00 aluminum and scrap. As for the price difference between A00 aluminum and scrap, on August 24, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was 2,305 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap was 1,084 yuan/mt. Trade side, according to SMM customs data, in July 2026, China's aluminum scrap imports totaled approximately 119,600 mt, down MoM from 133,000 mt in June. This was mainly affected by the previous inverted price spread between Chinese and overseas markets and shipping delays, with overseas high-quality scrap supply remaining low. Affected by the UAE's aluminum scrap export ban and the EU's tariff hike policy, the contraction effect of European and Middle Eastern supply continued to manifest, further consolidating Southeast Asia's position as a major supplementary source. The aluminum scrap market is expected to sustain a narrow sideways pattern with demand suppression and cost support this week. Currently at the tail end of the traditional off-season, end-user orders are unlikely to see any substantial surge. Scrap utilization enterprises continue their purchasing as needed strategy, maintaining cautious procurement sentiment, and the pre-season effect for the peak season is not yet significant. Enterprises need to wait and see for subsequent orders. The main trading range for shredded aluminum tense scrap (priced based on aluminum content) is expected to move around the range of 19,900 to 20,700 yuan/mt.
Secondary Aluminum Alloy:Spot market: Today, spot market quotes were mostly stable, with tentative upward adjustments in some areas. Some enterprises considered raising prices by 50 to 100 yuan/mt, mainly driven by the recent rise in aluminum prices and raw material costs. However, since end-use demand remains relatively weak, market transaction improvement was limited, and enterprises remained cautious about accepting orders after the price hike. Most enterprises opted to keep quotes stable and observe the market for now. Overall, cost support has strengthened somewhat, but demand-side constraints remain evident, and ADC12 prices will continue to consolidate at highs in the short term.
Comprehensive Outlook:Macro sentiment fluctuates, and the Middle East situation has entered a "neither war nor peace" state, frequently disturbing aluminum prices in China and overseas. Fundamentals side, the destocking trend of China's aluminum ingot inventory continues, providing bottom support for aluminum prices. However, overseas, driven by newly commissioned capacity and production resumptions, daily average aluminum production is expected to continue to rebound. The SHFE/LME price ratio is recovering, and as orders on hand are digested, export demand is expected to gradually weaken. In addition, domestic end-user demand in China is lackluster, the transition period between off-season and peak season has not been clearly defined, and the market has some concerns about peak season demand. In the short term, aluminum prices are expected to continue to consolidate on a subdued note.
[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 decision made by the client is unrelated to SMM.]
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