8.28 SMM Aluminum Morning Meeting Minutes
Futures: The most-traded SHFE aluminum 2610 contract closed at 23,960 yuan/mt, up 125 yuan from yesterday’s settlement price, a gain of 0.52%. It opened at 23,850.00 yuan/mt and fluctuated within the range of 23,840–23,965 yuan/mt. Prices traded above the MA5 (23,812.00), MA10 (23,803.00), MA30 (23,694.00), and MA60 (23,582.00) moving averages. The medium and long-term moving averages remained in a bearish alignment and continued to press lower overall. The drift-higher structure persisted, with the upper high-price range forming key resistance. For the MACD indicator, DIF (68.1622) was below DEA (89.6494), and the MACD green histogram stood at -42.9745, indicating that bearish momentum had eased somewhat. The suggested core trading range for SHFE aluminum was 23,400–24,100 yuan/mt. The LME aluminum 3M contract closed at $3,233.00/mt, up 0.28%. It opened at $3,225.00/mt and fluctuated within the range of $3,225.00–$3,234.00/mt. Prices traded above the MA5 (3,228.60), MA10 (3,228.60), and MA30 (3,224.62), but below the MA60 (3,243.45). The medium and long-term moving averages were in a bearish alignment and gradually pressed lower. An overall consolidating repair structure emerged, with the 60-day daily average above forming clear resistance. For the MACD indicator, DIF (-0.6764) was below DEA (1.9718), and the MACD green histogram was -5.2964, indicating that bullish momentum had weakened somewhat, with consolidation and adjustment at lows. The suggested core trading range for LME aluminum was $3,150–$3,280/mt.
Macro front: People familiar with the matter revealed that the Trump administration had repeatedly told mediators that it had no intention of returning to the terms of the memorandum of understanding reached between the US and Iran in June, adding major obstacles to intensive mediation efforts to restart the diplomatic process this week. Rezai, Secretary of Iran’s Supreme National Security Council, said Iran had prepared a list of conditions to present to the US. At present, vessels had been allowed to temporarily pass through specific channels in the middle of the Strait of Hormuz, but future passage through the strait would be subject to a memorandum of understanding signed with the US. Rezai, Secretary of Iran’s Supreme National Security Council, said during a meeting with Qatar’s Prime Minister and Foreign Minister Mohammed that Iran did not trust the US because it had repeatedly reneged on diplomacy and negotiations. The US must first take concrete measures to meet Iran’s conditions, and only then would Iran open the Strait of Hormuz. Cleveland Fed President Hammack reiterated that policymakers should take action now to curb inflation. She added that current interest rates were not enough to cause price pressures to pull back on their own. At last month’s policy meeting, three officials cast dissenting votes, including Hammack, who advocated a 25-basis-point rate hike. Policymakers ultimately kept the benchmark interest rate unchanged for the fifth consecutive time.
Fundamentals: Markets outside China: Overseas aluminum production resumptions and new capacity continued to ramp up as planned, and damaged capacity in the Middle East was gradually recovering. The market’s expectations that the global aluminum market would shift from tightness to looseness in the longer term persisted, continuously capping upside room for aluminum prices. However, current LME visible inventory remained at a historically low level of around 250,000 mt, and low inventory provided bottom support for LME aluminum. As oil prices pulled back, overseas smelting energy costs edged down on the margin, weakening cost support for aluminum prices. Spot premiums improved only limitedly, and bulls lacked sufficient momentum to keep pushing higher. China market: On the inventory side, China’s aluminum social inventory continued to destock, falling to the 852,000 mt threshold, showing counter-seasonal destocking and providing strong support for aluminum prices. On the demand side, downstream processing enterprises’ operating rate stayed at a neutral level. With the traditional “September peak season” approaching, the market had expectations for subsequent demand improvement, but downstream front-loaded restocking was limited and participants were still watching for actual peak-season demand to materialize; spot transactions were mainly driven by rigid demand.
Primary aluminum market: Today, the SHFE aluminum 2609 contract’s futures center moved higher than yesterday, while today’s buying and selling sentiment improved somewhat from yesterday. Spot premiums for SHFE aluminum transactions were flat from yesterday, with today’s main deals at a discount of 20 yuan/mt to on par with the SHFE aluminum 09 contract. Today, aluminum futures rose for consecutive sessions. Against the backdrop of elevated aluminum prices, downstream processing enterprises in the central China market showed low buying sentiment, mainly delaying purchases to reduce in-factory inventory. With both premiums and absolute prices staying high, suppliers actively sold, with no clear willingness to hold prices firm, and market prices saw a collapse-style drop. Ultimately, actual transaction prices in the central China market were around a discount of 80-120 yuan/mt against the SHFE aluminum 09 contract. Today, aluminum prices edged up, while the spot market was under pressure and weakened. Although inventory continued to decline, the inter-regional arbitrage window opened and northern cargoes were already en route; expectations for arrivals turned marginally more bullish. In addition, under the month-end cash-out demand amid a dual-high pattern of absolute prices and the spot-futures price spread, suppliers increased the pace of price cuts to sell, with offers gradually moving lower and circulation clearly loosening. Facing high aluminum prices, downstream buyers only maintained the minimum level of rigid demand, with limited purchase willingness; traders were also clearly wary of high prices and had no intention to actively take positions, only buying low-discount cargoes as needed, and overall transactions were poor. Spot transaction prices were concentrated at a premium of 200-240 yuan/mt against the SHFE aluminum 2609 contract.
Secondary aluminum raw material: Today, SMM A00 spot aluminum prices closed at 23,920 yuan/mt, up 50 yuan/mt MoM from the previous trading day, while prices in China’s aluminum scrap market were overall steady. In terms of the price difference between A00 aluminum and aluminum scrap, as of August 27, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was about 2,394 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap was about 1,173 yuan/mt, steady WoW. Against the backdrop of a continued rebound in primary aluminum prices, aluminum scrap saw relatively limited fluctuations, and the price transmission mechanism was impeded, mainly constrained by two factors: first, with the traditional peak season about to arrive, downstream demand for secondary aluminum alloy showed no obvious improvement; second, inventories of wrought aluminum alloy scrap raw materials such as doors and windows in Henan and other regions remained high, weakening the upside elasticity of aluminum scrap prices. In addition, on the supply side, constraints from the “reverse invoicing” policy continued, and the scarcity of compliant, invoiced aluminum scrap provided a floor support for aluminum scrap prices. On the import side, this week the imported shredded aluminum zorba price at Ningbo port was lowered from 21,670 yuan/mt to 21,370 yuan/mt (tax included), and at Tianjin port from 21,720 yuan/mt to 21,420 yuan/mt (tax included). Recently, the import window improved compared with earlier, traders’ inquiries and purchasing enthusiasm increased, and import supply rose somewhat. In the short term, as the market is currently at the tail end of the traditional off-season, downstream scrap utilization enterprises have yet to see a clear recovery in orders, the pre-positioning effect ahead of the peak season is not significant, and scrap utilization enterprises continued to purchase as needed and maintain a low-inventory strategy, with limited acceptance of price increases; some enterprises chose to stay temporarily stable and wait on the sidelines after following the earlier price rise. On the import side, previously traded cargoes arriving at ports in succession provided some supply replenishment, but the deeper effects of the UAE ban and the EU’s tariff hikes will still limit the ramp-up of high-quality scrap imports.
Secondary aluminum alloy: Spot: Today, overall ADC12 market quotes remained stable, and the SMM ADC12 price held steady at 23,950 yuan/mt from the previous trading day. Both aluminum prices and futures fluctuated only slightly, with no obvious changes in cost support or demand-side performance; enterprises showed weak willingness to adjust prices, and most producers chose to stay temporarily stable and wait on the sidelines. End-use demand is still relatively weak, with downstream purchasing mainly driven by rigid demand, and overall market transactions saw limited improvement; meanwhile, raw material costs such as aluminum scrap stayed at a relatively high level, providing some support to ADC12 prices. With no clear changes on either the supply or demand side, ADC12 prices are expected to continue to move sideways in the short term, and market attention remains focused on further fluctuations in aluminum prices and whether end-use demand can see marginal improvement going forward. On the import side, ex-China ADC12 offers temporarily held steady at $3,050-3,190/mt, and the immediate import loss remained slightly around 900 yuan/mt.
Overall outlook: Overall, macro front pressure on aluminum prices has strengthened recently. The Jackson Hole annual meeting and Walsh’s debut brought policy uncertainty; the strengthening US dollar index, together with rising expectations of rate hikes, as well as the fading risk premium from US-Iran geopolitical risks and the pullback in oil prices, jointly formed resistance for aluminum prices. However, continued destocking of China inventory and the approaching expectations for the “September peak season” provided strong support on the downside. With bullish and bearish factors intertwined, aluminum prices are expected to continue to consolidate at highs.
[The information provided is for reference only. This article does not constitute direct advice for investment research decisions. Clients should make decisions prudently and should not use this as a replacement for their own independent judgment. Any decisions made by clients are unrelated to SMM.]
![SHFE aluminum falls, spot aluminum purchasing sentiment improves and premiums rise [SMM Aluminum Spot Midday Review]](https://imgqn.smm.cn/usercenter/BrEfh20251217171652.jpg)
