9.22 SMM Aluminum Morning Meeting Minutes
Futures: SHFE aluminum closed at 24,195 yuan/mt last night, down 0.45%. The price broke below MA5 (24,445) and MA10 (24,262.5), but remained above MA30 (24,083) and MA60 (23,700), with moving averages showing short-term bearish pressure and mid-term bullish support. The MACD indicator showed DIF at 105.8 and DEA at 131.0, with a death cross at high levels and the green bars expanding to -50.36, indicating strengthening short-term bearish momentum. Trading volume was 64,700 lots, below the MA5 average volume, reflecting cautious market participation. The core trading range for SHFE aluminum is suggested at 24,000-24,600. LME aluminum closed at $3,274.5/mt, edging up 0.35%. The price was slightly below MA5 (3,280.7) and MA10 (3,279.1), but remained above MA30 (3,269.3) and MA60 (3,222.2), with the mid-term trend intact. The MACD indicator showed DIF at 7.48 and DEA at 10.64, with a death cross above the zero axis and green bars expanding to -6.32, indicating weak short-term momentum. The core trading range for LME aluminum is suggested at 3,250-3,320.
Macro front: At the invitation of US President Trump, President Xi Jinping will pay a state visit to the US from September 23 to 25. During the visit, President Xi will have in-depth exchanges of views with President Trump on major issues concerning China-US relations as well as world peace and development. This will be President Xi's first visit to the US in three years and his first state visit to the US in 11 years, and it will also mark reciprocal visits by the two heads of state within half a year. On September 20 local time, Chinese lead person for China-US economic and trade affairs and Vice Premier He Lifeng held economic and trade consultations with US lead persons Treasury Secretary Bessent and Trade Representative Greer in New York.
Fundamentals: On the supply side, China's weekly aluminum production remained stable last week, while some downstream sectors saw certain production cuts, reducing liquid aluminum purchases and lowering the proportion of liquid aluminum 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. On the demand side, with the upcoming holiday, downstream stocking sentiment improved slightly. On the 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 social inventory of aluminum ingots fell by 12,000 mt from last Thursday and by 55,000 mt from last Monday. In the short term, the destocking trend for aluminum is expected to continue.
Primary aluminum market: On Monday, the SHFE aluminum 2610 contract showed no significant change from the previous trading day, and spot trading was lackluster. Most suppliers indicated reluctance to hold excessive inventory ahead of the holiday, and the spot trading center shifted lower on Monday. SMM A00 aluminum ingot spot premiums were transacted between parity and a premium of 20 yuan/mt. On Monday, SHFE aluminum futures moved sideways in a narrow range, and trading sentiment in the central China market remained sluggish. At the start of the week, downstream processing enterprises showed insufficient restocking willingness, and having already made substantial purchases at earlier low prices, they drove current market quotes continuously lower. With the holiday approaching, suppliers preferred to reduce inventory and showed weak willingness to hold prices firm, with only some large players maintaining high premiums. Ultimately, the actual transaction price range in the central China market centered around a discount of 70-100 yuan/mt against the SHFE aluminum October contract. SMM daily aluminum ingot inventory data across the three regions increased by 1,000 mt, with only the Gongyi area showing destocking.
South China market: On Monday, aluminum prices edged lower, and the spot market showed a weak but stable adjustment. Weekend arrivals increased and inventory accumulated slightly, but the growth was mainly from imported aluminum, while domestic supply remained relatively scarce, providing limited improvement to spot circulation. Suppliers, especially traders above designated scale, regained the willingness to hold prices firm, with quotes mostly remaining steady and only a few slightly lowered. Discounted transactions were actually limited, and supply circulation was tight. On the purchasing side, both downstream buyers and traders showed increased willingness to replenish, shifting from earlier wait-and-see price pushing to actively buying non-premium cargoes, with overall transactions improving. Spot transaction prices were concentrated at premiums of 210-250 yuan/mt against the SHFE aluminum 2610 contract.
Aluminum scrap: On Monday, SMM A00 aluminum closed at 24,320 yuan/mt, down 60 yuan/mt from the previous trading day. Aluminum scrap market prices followed slightly lower, with some regional varieties holding steady amid wait-and-see sentiment. Regarding price differences, on September 21, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was approximately 2,572 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap was approximately 1,351 yuan/mt. On the supply side, the tight raw material supply pattern remained unchanged, and the scarcity of compliant, invoiced aluminum scrap continued to rise. Notably, tax inspections in the central China region continued to intensify, and the sharp decline in regional aluminum scrap supply will cause significant disruption to aluminum scrap circulation. On the demand side, the cast aluminum alloy "September peak season" fell short of expectations, with demand yet to show substantial volume growth. Terminal orders improved only slightly compared with the off-season, without forming concentrated restocking. Demand for wrought aluminum alloy was moderate, and in-factory aluminum scrap inventory was relatively ample. Aluminum scrap market prices are expected to continue consolidating on a strong note. On the supply side, the impact of tax inspections continues to spread. If aluminum scrap yards slow down shipments, circulating supply will tighten again, and aluminum scrap prices are expected to receive strong support. Going forward, close attention will remain on the chain reactions of tax inspections across the aluminum scrap industry chain and changes in orders at scrap utilization enterprises.
Secondary aluminum alloy: Spot market: On Monday, ADC12 market prices were generally stable, with SMM ADC12 prices holding steady at 24,500 yuan/mt from the previous trading day. Neither costs nor demand showed significant changes, and market sentiment remained largely wait-and-see. Cost side, aluminum scrap raw material prices showed limited overall fluctuations on Monday. However, as tax invoice policy enforcement tightened in multiple regions, compliance procurement requirements for enterprises increased, making invoiced aluminum scrap supply relatively tight. Some enterprises' comprehensive raw material procurement costs remained high, with limited downside in the short term. Demand side, market procurement remained primarily need-based, with limited release of peak-season demand. Short-term prices are expected to consolidate on a strong note, and future price trends will require close attention to tax invoice policy enforcement progress, changes in aluminum scrap raw material supply, and downstream stockpiling ahead of the dual holidays.
Comprehensive outlook: Macro front, the Chinese and US heads of state are about to meet, and Chinese and US economic and trade lead persons held consultations in New York, raising expectations for easing China-US relations. Fundamentals, production resumptions in the Middle East continued to accelerate, but some new projects were delayed, and the pace of operating capacity increases is expected to slow down in the coming months. With the short holiday approaching, downstream stocking demand supports destocking, and short-term aluminum prices are expected to consolidate at highs.
[The information provided is for reference only. This article does not constitute direct investment research decision 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.]
