SHFE Aluminum Futures Decline, Central China Sees Increased Downstream Buying Interest

[SMM Aluminum Alloy Daily Comment] Today, the SMM ADC12 price remained flat at 23,900 yuan/mt. This week, cast aluminum alloy futures diverged from SHFE aluminum futures, with the former strengthening steadily while the latter fell below the 24,000 yuan/mt mark. In the spot market, A00 aluminum prices continued to decline, while ADC12 prices remained firm. Today, the price spread between the two returned to positive territory, ending the inversion that had persisted since April, highlighting the resilience of alloy prices.

[Geopolitical Disturbances Marginally Weaken, Accelerating Destocking Supports Aluminum Prices Fluctuating Upward] On the macro front, Trump once again claimed that US-Iran negotiations have entered the "final moment," but the market has become desensitized to his repeated similar statements, and the geopolitical risk premium is marginally weakening. On the fundamentals side, the supply gap outside China is expected to provide strong bottom support for aluminum prices, and expectations of rising energy costs also form a bullish driver for aluminum prices; however, the high inventory pressure in China remains relatively evident, which is expected to limit the upside room for China's aluminum prices, and in the short term, China’s aluminum prices are expected to mainly fluctuate and adjust.

[SMM Central China Spot Aluminum Midday Review] SHFE aluminum futures prices continued to decline compared to yesterday's early session, with a relatively narrow spot-futures spread. Traders in the central China market took the opportunity to hold prices firm, maintaining high discounts and shipping large volumes, while market trading sentiment edged up from yesterday. The actual transaction price range in the central China market was around a discount of 100-130 yuan/mt against the SHFE aluminum June contract.