4.10 SMM Morning Meeting Minutes
Futures:SHFE aluminum closed at 24,670 yuan/mt in the night session, up 0.39%. The price stood above all moving averages (MA5=24,656, MA10=24,619.5, MA30=24,559.17, MA60=24,351.92), with the moving average system in a bullish alignment. The MACD indicator showed a golden cross with DIF (91.95) above DEA (68.71), and the histogram expanded to 46.48, indicating continuously strengthening bullish momentum. The suggested key trading range for SHFE aluminum is 24,500-25,100. LME aluminum closed at $3,447.5/mt, down 0.79%. The price fell below MA5 (3,477.2) but remained above MA10 (3,404.8), MA30 (3,344.08), and MA60 (3,233.28), indicating a short-term pullback while the medium-term bullish structure remained intact. The MACD indicator showed a golden cross with DIF (59.06) above DEA (50.24), but the histogram narrowed to 17.64, suggesting weakening upward momentum. The suggested key trading range for LME aluminum is 3,420-3,500.
Macro Front:The US and Iran were set to hold their first round of talks in Pakistan on April 11, but significant differences remained between the two sides on ceasefire terms, mainly centered on Iran's uranium enrichment activities, navigation through the Strait of Hormuz, the Lebanon ceasefire issue, and the withdrawal of US troops from the Middle East. The US core PCE price index rose 3% YoY in February, narrowing slightly from the previous reading of 3.1%, in line with market expectations. Services inflation slowed down notably, with real spending up only 0.1% MoM. US initial jobless claims increased by 16,000 to 219,000 last week, above market expectations.
Fundamentals:Supply side, outside China, directly impacted by geopolitical conflicts, Middle Eastern aluminum enterprises cut production. Recently, UAE's EGA and Bahrain's Alba were successively hit by missile strikes, with production facilities damaged. The extent of damage was still under comprehensive assessment. The market widely expected large-scale production cuts or even shutdowns, with the global aluminum supply gap expected to widen and concerns over ex-China supply continuing to escalate. In China, the proportion of liquid aluminum rebounded in March as downstream sectors fully resumed work after the holiday, surging 9.3 percentage points MoM to 73.7%, above early-month expectations. Entering the traditional peak consumption season in April, downstream operating rates continued to rise, and the proportion of liquid aluminum is expected to climb further. Inventory side, high aluminum prices in China suppressed downstream willingness to actively restock, with downstream enterprises generally purchasing as needed based on orders and maintaining low inventory operations, with no large-scale stockpiling behavior for now. This Thursday, China's aluminum ingot social inventory saw an inventory buildup of 35,000 mt WoW, with short-term inventory still at a relatively ample level. Inventories outside China continued to decline, with LME aluminum inventory maintaining a downward trend this week, having fallen to 414,000 mt.
Primary aluminum market:In the morning session, SHFE aluminum 2604 fluctuated downward, with the trading center shifting lower than the previous day. Affected by declining aluminum prices, sellers raised their offers, and overall market shipment sentiment weakened. As some downstream players held inventory and aluminum prices remained at highs, overall purchasing sentiment also declined yesterday. Market transactions were mainly concentrated at SMM A00 aluminum at a premium of 10-20 yuan/mt. Yesterday, the east China market shipment sentiment index was 3.25, down 0.09 MoM; the purchasing sentiment index was 3.24, up 0.56 MoM. Yesterday, SHFE aluminum futures prices fluctuated downward in a correction, and the central China market lacked confidence in prices, with a strong wait-and-see atmosphere overall and buying sentiment declining slightly. As futures fell, traders actively shipped out cargoes, but actual transaction prices were weak. Suppliers had a strong willingness to hold prices firm, with offers only edging slightly lower. Ultimately, actual transaction prices in the central China market ranged from parity to a premium of 30 yuan over the central China price. Yesterday, the central China market shipment sentiment index was 2.73, flat MoM; the purchasing sentiment index was 2.4, down 0.04 MoM.
Aluminum scrap:Yesterday, spot primary aluminum fell 160 yuan/mt from the previous trading day, and the aluminum scrap market followed the decline overall. Yesterday, the tightening regulatory stance on the "reverse invoicing" policy remained unchanged, with compliance costs in the aluminum scrap recycling process staying elevated, and actually available invoiced cargoes remaining tight. Demand side, the divergence in shipments between aluminum tense scrap and wrought aluminum alloy scrap intensified. For aluminum tense scrap such as shredded aluminum tense scrap and ADC12 aluminum shavings, downstream scrap utilization enterprises including secondary alloy producers mostly maintained purchasing as needed with low inventory operations. For wrought aluminum alloy scrap such as baled UBC and 5-series/3-series plate off-cuts, downstream secondary aluminum plate/sheet and strip enterprises were in peak production season with relatively high stockpiling enthusiasm. However, overall, high price levels combined with wild swings in aluminum prices continued to suppress purchasing enthusiasm among scrap utilization enterprises. Price spread side, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was recorded at 3,005 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap was 1,715 yuan/mt. The aluminum scrap market is expected to hover at highs next week, with the mainstream range for shredded aluminum tense scrap (priced based on aluminum content) around 20,800-21,300 yuan/mt (tax-exclusive). Supply side, policy constraints are unlikely to ease in the short term, and tight compliant cargoes combined with suppliers holding back cargoes will continue to underpin prices. Demand side, the divergence between aluminum tense scrap and wrought aluminum alloy scrap will persist. Primary aluminum remains subject to fluctuations due to factors such as Middle East geopolitical conflicts, and coupled with lackluster downstream peak-season recovery, the overall tug-of-war between sellers and buyers will continue. Caution is warranted against market risks arising from aluminum price fluctuations at highs and poor cargo circulation.
Secondary aluminum alloy:Spot cargo side, ADC12 market prices were generally marked down yesterday, with declines concentrated in the range of 100-200 yuan/mt. The main reasons were the cost side decline driven by the expanding drop in aluminum prices, as well as insufficient support from the demand side. Currently, downstream procurement remained dominated by rigid demand, and market transactions showed mediocre performance. Meanwhile, low-priced supplies flowed into some regions, intensifying price competition and further suppressing market confidence. In the short term, demand side weakening is expected, and ADC12 prices still face certain downward pressure.
Aluminum Market Summary:Macro front, the US and Iran are scheduled to hold their first round of talks on April 11, but significant disagreements remain on core issues such as uranium enrichment and strait navigation, casting doubt on negotiation prospects. Passage through the Strait of Hormuz remains subject to Iranian permit restrictions, with most vessels adopting a wait-and-see approach, and geopolitical risk premiums have not subsided. Supply side, the substantive damage caused earlier is irreversible. Aluminum capacity in the Middle East suffered direct military strikes, with UAE's EGA and Bahrain's Alba Aluminium successively attacked and production facilities damaged. The global aluminum supply gap is expected to widen significantly, and concerns over ex-China supply continue to escalate. Meanwhile, China has entered the traditional peak consumption season, with the proportion of liquid aluminum rebounding sharply to 73.7%, downstream operating rates rising steadily, and demand side support remaining solid. Overall, the macro perspective of restricted strait passage and conflict escalation risks resonated with the fundamental supply hard damage and low global inventory, jointly providing strong bottom support for aluminum prices. However, weak interest rate cut expectations, higher-than-expected aluminum ingot inventory buildup in China, and the adverse expectations on consumption and inflation from recent high fluctuations in oil prices have all notably weighed on the upside room for aluminum prices. In the short term, aluminum prices are fluctuating at highs.
[The information provided is for reference only. This article does not constitute direct advice for investment research decisions. Clients should make prudent decisions and not replace independent judgment with this information. Any decisions made by clients are not related to SMM.]
![Middle East Geopolitical Tensions Remained Uncertain, Aluminum Prices Mainly Fluctuated at Highs in the Short Term [SMM Aluminum Price Weekly Review]](https://imgqn.smm.cn/usercenter/jWDCu20251217171653.jpg)
