9.8 SMM Aluminum Morning Meeting Minutes
Futures: The most-traded SHFE aluminum contract opened at 24,400 yuan/mt in the night session on September 7, reached a high of 24,470 yuan/mt and a low of 24,335 yuan/mt, and closed at 24,450 yuan/mt, up 30 from the previous close, a gain of 0.12%. Prices traded above the 5/10/20/40/60-period moving averages, with short, medium, and long-term moving averages diverging upward in a bullish alignment, forming stepped support. Trading volume contracted notably during the session, and open interest fell slightly, driven mainly by bear position reductions. On the technical front, the 4-hour MACD golden cross extended, with the red histogram maintained and bullish momentum continuing. On September 7, LME aluminum opened at $3,291.0/mt, reached a high of $3,320.5/mt and a low of $3,282.0/mt, and closed at $3,312.5/mt, up 0.50% from the previous close. It drifted higher during the day, with prices rising again and closing above the short-term moving averages. Open interest pulled back slightly that day, driven mainly by bear position reductions. On the technical front, the daily MACD red histogram extended, with bullish momentum maintained.
Macro front: On September 7, the Ministry of Industry and Information Technology and the State Administration for Market Regulation jointly issued the Notice on Promoting Standardized Supplier Payment and Optimized Payment Term Management for Automakers, the first national-level payment term management document for an industry sector and a key measure for industrial ecosystem development. According to CME's "FedWatch": the probability of the US Fed keeping rates unchanged in September is 39.6%, and the probability of a cumulative 25 basis point hike is 60.4%. The probability of the US Fed keeping rates unchanged through October is 29.1%, the probability of a cumulative 25 basis point hike is 54.9%, and the probability of a cumulative 50 basis point hike is 16.1%.
Fundamentals: Entering the traditional peak season in September, earlier disruptions have gradually been cleared, and operating rates across sectors have broadly seen restorative growth. Last week, the operating rate of primary aluminum alloy producers rebounded 1.2% to 59.0%, the operating rate of aluminum plate/sheet and strip producers rebounded 0.2 percentage points to 69.4%, the operating rate of aluminum wire and cable producers rebounded 1% to 64.0%, the operating rate of aluminum extrusion producers rebounded to 51.1%, the operating rate of aluminum foil producers rebounded 0.4 percentage points to 71.1%, and the operating rate of secondary aluminum producers rebounded to 51.6%. On the inventory front, according to SMM statistics, China's aluminum ingot warehouse withdrawals totaled 110,500 mt during August 31-September 6, down 200 mt from the previous week; China's aluminum billet warehouse withdrawals totaled 36,100 mt during August 31-September 6, down 5,300 mt from the previous week.
Primary aluminum market: Today, SHFE aluminum futures were basically unchanged from the previous trading day, with the price center gradually rising in the morning session, while spot market transaction prices showed signs of weakening under pressure. However, weekend destocking was relatively strong. Quotes were largely firm at market open, with early spot transactions concentrated at a premium of 20 yuan/mt against the SHFE aluminum 2609 contract. Today, mainstream A00 aluminum ingot transactions ranged from parity to a premium of 40 yuan/mt. Aluminum futures rallied again in the night session. In the central China market, pre-market quotes were relatively low, and traders tended to restock aggressively at deep discounts. With Friday approaching, downstream processing enterprises showed some recovery in purchasing and stockpiling sentiment, and overall market trading sentiment improved, driving quotes gradually higher. Ultimately, actual transaction prices in the central China market centered around a discount of 110-150 yuan/mt against the SHFE aluminum 09 contract. On the inventory side, aluminum ingot inventory in major consumption regions fell 7,500 mt MoM today, with all three regions showing destocking. Aluminum prices edged up today, and the spot market stabilized after earlier weakness. With absolute prices staying high, some suppliers briefly attempted to hold prices firm but then shifted to actively lowering quotes to stimulate sales and monetize inventory. However, limited arrivals from the north kept inventory from increasing for now, while the spot-futures price spread quickly weakened back to its previous platform level. These two factors prompted other suppliers to firmly hold prices and hold back from selling, gradually tightening spot supply. Downstream buyers passively purchased as needed amid high prices. With no immediate risk of surging premiums, traders shifted from cautious, limited buying to increasing market participation to absorb discounted cargoes, and transactions showed an improving trend.
Aluminum scrap:Yesterday, SMM A00 aluminum closed at 24,410 yuan/mt, up 50 yuan/mt from the previous trading day. Aluminum scrap market prices were largely stable overall, with slight increases. A substantive recovery in end-use demand still needs to be observed. Inventory digestion for wrought aluminum alloy scrap still requires time, and scrap utilization enterprises are likely to continue purchasing as needed and maintaining low-inventory operating strategies, with the pace of price increases expected to remain slow. This week, the aluminum scrap market is expected to consolidate on a strong note with a slight upward shift in the price center, with close attention needed on the pace of downstream order recovery.
Secondary aluminum alloy:Spot market: Today, the ADC12 market was largely stable with a wait-and-see tone. SMM ADC12 prices held steady at 24,300 yuan/mt from the previous day. On the cost side, aluminum prices and aluminum scrap raw material prices fluctuated relatively mildly today, lacking a clear driver for further price changes. On the demand side, the traditional peak season is gradually beginning. Although end-use demand has recovered somewhat from the off-season, the recovery remains mild, and order growth is not enough to generate a clear industry-wide improvement. With both cost and demand drivers relatively weak, enterprises generally showed limited willingness to adjust prices, and market sentiment was largely stable. Short-term prices are expected to maintain a stable-to-strong pattern. Going forward, attention should remain on changes in aluminum prices and aluminum scrap costs, as well as whether end-use demand can further release during the September peak season.
Comprehensive outlook:US nonfarm payrolls significantly exceeded expectations, and expectations for US Fed interest rate hikes rose again. Expectations of macro tightening remain subject to repeated disturbances, creating periodic pressure on aluminum price gains. Domestically, low aluminum ingot inventory persists, with inventory maintaining a destocking trend. The spot market provides strong support for aluminum prices and remains the dominant factor in the current market. The demand side has entered the traditional September peak season, with processing enterprises seeing a recovery in operating rates, but a full recovery in end-user orders still requires time, and the actual fulfillment of the peak season remains to be observed. Meanwhile, aluminum billet inventory continues to build up, posing a potential risk of transmission to the aluminum ingot side. The supply of aluminum outside China continues to recover, further constraining the upside room for aluminum prices. From the futures perspective, SHFE aluminum shows a strong technical pattern but with weakening upward momentum at the margin, and insufficient trading volume limits the strength of an upward breakout, with SHFE and LME trends diverging. In the short term, aluminum prices are expected to consolidate on a strong note.
[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 substitute for independent judgment. Any decisions made by clients are unrelated to SMM.]
![Cast aluminum volume shrinks while open interest rises, intensifying divergence; aluminum scrap consolidates on a strong note [SMM cast aluminum alloy morning comment]](https://imgqn.smm.cn/usercenter/TFHUe20251217171651.jpg)
