Tsingshan in Talks with Global Traders for $3B Aluminum Smelter in Indonesia

Rio Tinto and Century Aluminum raised US billet premiums by around 12%, about 3 cents/lb. (around USD 110/t) above pre-war levels. Middle East disruptions have affected supply from the Persian Gulf, which accounts for about 20% of US imports, tightening domestic supply. The US Midwest premium has reached a record USD 1.1325/lb., while aluminum prices have risen over 10% since late February. Amid growing uncertainty, buyers are shifting to domestic sourcing, while producers are pushing for long-term contracts to secure pricing and supply.

[Geopolitical Disruptions Combined with Supply-Demand Resonance, Aluminum Prices Hold Up Well at Highs] Overall, from a macro perspective, risks of Middle East conflicts persist, resonating with fundamental supply-side hard damage and low global inventory to jointly provide strong bottom support for aluminum prices. However, weak interest rate cut expectations, China's aluminum ingot inventory buildup exceeding expectations, 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 fluctuate at highs.

[SMM Cast Aluminum Alloy Morning Comment: Aluminum alloy futures closed up 1.64% overnight as bullish sentiment heated up] The aluminum alloy 2606 contract opened at 23,755 yuan/mt overnight and closed sharply higher at 24,130 yuan/mt. At the beginning of the night session, prices moved sideways around the opening level with a steady trend. Mid-session, bulls pushed prices up rapidly, driving futures to the intraday high of 24,200 yuan/mt. Prices then pulled back slightly and consolidated, running above the intraday VWAP throughout the session, indicating a solid bullish structure.