9.21 SMM Aluminum Morning Meeting Minutes
Futures: SHFE aluminum closed at 24,375 yuan/mt in the previous trading session, edging down 0.04%. The price stood above the MA10 (24,304) and MA30 (24,089.5), but slightly below the MA5 (24,258). Short-term moving averages flattened, while the medium-term bullish alignment remained intact, with the market consolidating at highs overall. On the MACD indicator, DIF=129.53 and DEA=139.74. DIF stayed above the zero axis but maintained a death cross, with the histogram at -20.43, indicating weakening bullish momentum and lingering short-term correction pressure. Trading volume rebounded slightly to 54,800 lots, with moderate market activity. The suggested core trading range for SHFE aluminum is 24,000-24,600. LME aluminum closed at $3,293.5/mt, down 0.20%. The price was slightly below the MA5 (3,282.4) but still above the MA10 (3,288.85), MA30 (3,272.35), and MA60 (3,219.81). Short-term moving averages were intertwined, while the medium-term bullish alignment remained intact. On the MACD indicator, DIF=10.88 and DEA=11.92, with the histogram turning slightly negative to -2.08, suggesting bullish and bearish momentum approaching equilibrium and a directional choice looming in the near term. The suggested core trading range for LME aluminum is 3,270-3,350.
Macro front: The White House issued a statement saying US President Trump signed the Lindsey Graham Sanctioning Russia and Iran Act of 2026. The act authorizes and expands statutory sanctions, tariffs, and bans against Russia, and extends existing sanctions against Iran. US President Trump said the US is at a "decision stage" on the Iran issue, and "something very big" will happen in the near future. Options currently on the table include completely destroying Iran, letting Iran's economy continue to deteriorate, or reaching a deal. Iran's Khatam al-Anbiya Central Headquarters issued a statement saying intelligence shows the US has decided to take hostile action against Iran again, with the tacit approval of certain Middle Eastern countries. Any US attack will trigger Iranian retaliation.
Fundamentals: Supply side, China's weekly aluminum production remained stable last week, while some downstream sectors saw certain production cuts. Purchases of liquid aluminum decreased, and the proportion of liquid aluminum edged down by 0.02 percentage points. Outside China, according to foreign media reports, Alba's operating capacity recovered to around 1.3 million mt, further lifting operating capacity outside China. Demand side, with the upcoming holiday, downstream stocking sentiment picked up slightly. Inventory side, aluminum ingot shipments from Xinjiang were disrupted, and combined with downstream stockpiling, aluminum ingot destocking widened this week. As of this Monday, China's aluminum ingot social inventory fell by 12,000 mt from last Thursday and by 55,000 mt from last Monday. In the near term, the aluminum destocking trend is expected to continue.
Primary aluminum market: Intraday SHFE aluminum 2610 contract prices moved higher from the previous trading day, with spot premiums slightly suppressed. Downstream purchasing sentiment showed divergence, with some downstream players already stockpiling while others continued to push for lower prices. Last Friday, SMM A00 aluminum ingot spot transactions were between parity and a premium of 20 yuan/mt. Last Thursday night session, aluminum futures rallied again. Although Friday was a stockpiling cycle, high aluminum prices suppressed purchasing sentiment among downstream processing enterprises in central China, leaving market transactions relatively sluggish. Meanwhile, large suppliers tended to deliver long-term contracts ahead of schedule to avoid low premiums, showing strong willingness to hold prices firm, and quotes differed significantly between large and small suppliers. Ultimately, actual transaction prices in central China were around a discount of 60-90 yuan/mt against the SHFE aluminum 10 contract. SMM daily aluminum ingot inventory data across the three regions showed destocking of 9,000 mt, with all three regions destocking.
South China market: Last Friday, aluminum prices stopped falling and rebounded slightly, with the spot market in the doldrums. An aluminum enterprise in southwest China launched an incremental aluminum ingot tender. Near-term arrivals were tight but future arrival expectations rose. Combined with absolute prices at relatively low levels after the pullback, suppliers diverged again, with some holding prices firm and others cutting prices to cash out, easing spot supply circulation. Some downstream players showed willingness to rush to buy amid continuous price rise, steadily restocking. However, traders remained cautious with limited willingness to enter the market, only taking orders as needed. Demand follow-through was insufficient, and transactions weakened marginally.
Aluminum scrap: Last Friday, SMM A00 aluminum prices closed at 24,380 yuan/mt, up 200 yuan/mt from the previous trading day. Aluminum scrap market prices followed with gains of 100-150 yuan/mt. In terms of price differences, on September 18, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was about 2,557 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap was about 1,336 yuan/mt. Supply side, the tight raw material supply pattern remained unchanged, and the scarcity of compliant, invoiced aluminum scrap continued to rise. Notably, tax audits in central China continued to escalate, and the sharp drop in regional aluminum scrap supply will significantly disrupt aluminum scrap circulation. On imports, this week, imported shredded aluminum prices at Ningbo port rose from 21,370 yuan/mt to 21,470 yuan/mt (tax inclusive), and at Tianjin port from 21,420 yuan/mt to 21,520 yuan/mt (tax inclusive). Demand side, the cast aluminum alloy "September peak season" underperformed, with demand yet to see substantial volume growth. End-user orders improved only slightly from the off-season, without concentrated restocking. Wrought aluminum alloy demand was moderate, and in-factory aluminum scrap inventory was relatively ample. Aluminum scrap market is expected to continue consolidating on a strong note. Supply side, the impact of tax audits continued to spread. If aluminum scrap yards slow shipments, circulating supply will tighten again, providing strong support for aluminum scrap prices. Moving forward, we will continue to focus on tracking the chain reactions of tax audits on the secondary aluminum industry chain and changes in orders at scrap utilization enterprises.
Secondary aluminum alloy:Spot market: Last Friday, overall ADC12 market quotes were raised, with the SMM ADC12 price up 150 yuan/mt from the previous trading day to 24,500 yuan/mt. Cost side, recent tightening of tax invoice policy enforcement has intensified enterprises' reliance on purchasing invoiced raw materials, while invoiced supply is limited and priced high, driving up raw material procurement and invoice cost pressure simultaneously. In addition, futures have strengthened recently, providing some boost to spot market quotes. Overall, the current rise in ADC12 market prices is driven more by cost-side and supply constraints. Although marginal improvement on the demand side still provides some support, the core contradiction behind the current price increase remains concentrated in raw materials and tax invoices, and short-term spot prices are expected to hold up well.
Comprehensive outlook:The US Fed's first rate hike has landed, the situation in the Middle East remains unsettled, and macro sentiment still faces considerable uncertainty. Fundamentals-wise, production resumptions in the Middle East continue to accelerate, but some new projects have been delayed, and the pace of operating capacity increases is expected to slow down in the coming months. With the long holiday approaching, downstream stocking demand supports destocking, and aluminum prices are expected to consolidate at highs in the short term.
[The information provided is for reference only. This article does not constitute direct investment research or decision-making advice. Clients should make decisions prudently and not use this as a substitute for independent judgment. Any decisions made by clients have nothing to do with SMM.]
![Aluminum scrap supply shrinks, spot aluminum alloy holds up well [SMM cast aluminum alloy morning comment]](https://imgqn.smm.cn/usercenter/SBQYr20251217171651.jpg)
