5.13 SMM Morning Meeting Minutes
Futures:The most-traded SHFE aluminum 2606 contract closed at 24,640 yuan/mt, up 0.33%. The price was above MA5 (24,510.00), MA10 (24,579.00), and MA60 (24,538.25), but below MA3 (24,777.83). Short-term moving averages formed support, while the price was under pressure at MA30. The MACD indicator DIF (-43.9605) was below DEA (3.9767), with the histogram in negative territory (-95.8745), indicating weakening bearish momentum. The suggested core trading range for SHFE aluminum is 24,000-25,200. LME aluminum 3M closed at $3,586.5/mt, up 0.34%, moving sideways. The price was above MA5 (3,546.90), MA10 (3,532.25), and MA30 (3,537.42), and also above MA60 (3,395.29). Short-, medium-, and long-term moving averages all formed support, with the overall trend leaning bullish. The MACD indicator DIF (29.6317) was below DEA (35.0671), with the histogram in negative territory (-10.8708), indicating weakening upward momentum. The suggested core trading range for LME aluminum is $3,500-3,660/mt.
Macro Front:US President Trump will pay a state visit to China from May 13 to 15, and the White House released the list of business leaders accompanying Trump on the visit. In the technology sector, US corporate representatives visiting China include Tesla CEO Musk, Apple CEO Cook, and executives from semiconductor companies such as Qualcomm and Micron. In the financial sector, there are heads of Wall Street giants including Citi, Goldman Sachs, and Blackstone. In addition, executives from Boeing and Cargill are also on the list. US government insiders revealed that, due to the lack of progress in US-Iran negotiations, the US side is now "more seriously considering" resuming military action against Iran than in previous weeks. US President Trump stated that the conflict with Iran does not need to be resolved urgently and that he is confident he can prevent Iran from developing nuclear weapons. US inflationary pressures reignited, further squeezing the US Fed's room for interest rate cuts this year. The US April CPI rose 3.8% YoY, exceeding market expectations of 3.7% and hitting a new high since May 2023; core CPI rose 2.8% YoY, exceeding expectations of 2.7% and reaching a new high since September 2025.
Fundamentals:In China, the aluminum ingot destocking pace may be dragged down by the combined impact of multiple factors, including the lifting of the loading suspension order, backlogged cargo entering warehouses, concentrated release of enterprise inventory, and cautious end-user stockpiling willingness, coupled with the entry into the traditional consumption off-season after the conclusion of the April peak season. The inventory inflection point remains uncertain. In markets outside China, geopolitical conflicts have caused disruptions, highlighting the ex-China aluminum ingot supply gap, with spot premiums staying high. Production cuts in the Middle East are unlikely to resume production in the short term, and LME aluminum inventory continues to destock. Inventory side, mainstream consumption area aluminum ingot inventory fell 0.2 WoW yesterday, with destocking mainly in Wuxi and Gongyi.
Primary aluminum market:Yesterday, SHFE aluminum 2605 contract fluctuated downward in the early session, with the overall price center edging slightly lower compared to the previous trading day. Some sellers held prices firm and held back from selling yesterday. End-user buying sentiment remained at Monday's level with no notable improvement. Some traders saw improved buying sentiment due to the approaching delivery date and elevated premiums. Mainstream spot cargo quotes ranged from SMMA00 aluminum average price to SMMA00 minus 10 yuan/mt. Yesterday, the east China market shipments sentiment index was 2.86, down 0.05 WoW; the purchasing sentiment index was 2.81, up 0.14 WoW. Yesterday, the central China market trading atmosphere remained sluggish. Aluminum prices continued to strengthen, and invoice quota changes stabilized. Buying sentiment among downstream processing enterprises and traders remained subdued throughout, with overall quotes declining consecutively and suppliers showing weak willingness to hold prices firm. Ultimately, the actual transaction price range in the central China market hovered between parity and a discount of 20 yuan to the central China price. Yesterday, the central China market shipments sentiment index was 2.82, flat WoW; the purchasing sentiment index was 2.28, down 0.01 WoW.
Aluminum scrap:Yesterday, A00 aluminum price edged down 10 yuan/mt from the previous trading day, while the aluminum scrap market prices remained generally stable. Shredded aluminum tense scrap (priced based on aluminum content) mainstream range operated around 20,500-21,000 yuan/mt (tax exclusive). Imported shredded zorba (Ningbo Port) weekly operating range was raised by 200 yuan/mt to 21,870-22,070 yuan/mt (tax inclusive). On the price difference between A00 aluminum and aluminum scrap, on May 12, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was recorded at 2,723 yuan/mt, and the price difference between A00 aluminum and shredded aluminum tense scrap was 2,078 yuan/mt. Supply side, the tightening trend of compliant invoice sources intensified, raw material prices saw wild swings, and aluminum scrap yards generally held back from selling and held prices firm. High LME prices led import traders to adopt cautious strategies, and subsequent imports are expected to pull back. Demand side, the traditional off-season combined with prominent compliant invoice source issues led some regional enterprises to reduce or halt production. Wrought aluminum alloy scrap was supported by secondary aluminum plate/sheet and strip operating rates but with limited strength. Downstream purchasing was mainly driven by rigid demand, with strong wait-and-see sentiment. Shredded aluminum tense scrap (priced based on aluminum content) mainstream range is expected to remain in the doldrums at elevated levels this week, maintaining at 20,500-21,300 yuan/mt (tax exclusive). Supply-side policy constraints are unlikely to ease in the short term, with tight compliant sources combined with expected pullback in imports providing certain price support. Demand-side off-season effects continued, with downstream secondary aluminum enterprises cautiously watching, purchasing mainly through small rigid-demand restocking orders. The divergence pattern between aluminum tense scrap and wrought aluminum alloy scrap remained unchanged, with limited order growth. Vigilance is still needed against market risks from aluminum price fluctuations and tight supply.
Secondary Aluminum Alloy:Spot market, yesterday the ADC12 market overall operated with stable prices. A00 aluminum price fluctuations were limited, downstream demand remained steady, trading volume showed no significant increase, and both supply and demand sides were temporarily stable, with enterprises generally adopting a wait-and-see attitude. However, the recent tightening of reverse invoicing policies, with the scope of affected regions continuing to expand, has led to a lack of input invoices for enterprises, and compliant raw material supply has become increasingly tight. Meanwhile, the price spread between domestic and overseas markets remained inverted, imports are expected to decline, providing limited supplementation to the domestic market. Overall raw material circulation remained tight, and the cost side provided certain support for prices. Overall, in the short term, ADC12 prices are expected to move sideways amid the tug-of-war between cost support and weak demand.
Aluminum Market Summary:Ex-China aluminum supply disruption risks have not yet subsided, with a supply gap in ex-China aluminum. The strong LME trend transmitted to China, providing support for aluminum prices. However, the continuation of higher-than-expected inventory buildup in China is expected to weigh on domestic aluminum prices. At the same time, tightening invoicing regulations may lead to structural tightness in spot cargo, and the weakening spot market further limits the upside room for domestic aluminum prices. Close attention should be paid to the potential turning point in China's social inventory, which could drive an aluminum price rebound.
[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 use this as a substitute for independent judgment. Any decisions made by clients are not related to SMM.]
