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4.18 SMM Aluminum Morning Meeting Summary
Futures: Last night, the most-traded SHFE aluminum 2506 contract opened at 19,660 yuan/mt, with a high of 19,725 yuan/mt, a low of 19,505 yuan/mt, and closed at 19,645 yuan/mt, up 100 yuan/mt or 0.51% from the previous close. Yesterday, LME aluminum opened at $2,385/mt, with a high of $2,396/mt, a low of $2,363/mt, and closed at $2,385/mt, down $3.5/mt or 0.15%.
Macro: (1) The European Central Bank cut interest rates by 25 basis points as expected, marking the seventh rate cut in the past year, and the decision was unanimously passed (Bullish★) (2) US Fed's Williams: Monetary policy is in a good place, and there is no need to adjust interest rates soon at this time. (Bearish★)
Fundamentals: (1) Aluminum billet inventory: According to SMM statistics, the domestic mainstream consumption area aluminum billet inventory on April 17 was 209,200 mt, down 17,200 mt WoW from Monday. (Bullish★) (2) According to SMM statistics, the overall operating rate of the domestic aluminum downstream processing industry this week rose 0.20% WoW to 62.4%. (Bullish★) (3) In March 2025 (31 days), the national primary aluminum billets production totaled 1.489 million mt, up 211,000 mt or 16.5% MoM from February 2025 (28 days), but down 19,000 mt or 1.3% YoY. The domestic primary aluminum billets operating rate in March was 57.3%, up 8.2% MoM. (Bearish★)
Primary aluminum market: Yesterday morning, the SHFE aluminum center continued to move up above 19,750 yuan/mt, heading towards 19,800 yuan/mt. In the spot market, large buyers in east and south China were actively purchasing, with premiums remaining firm. Suppliers were more willing to sell as aluminum prices rebounded, and trading was active. The market traded at a premium of 20 yuan/mt against the SMM A00 average price. SMM A00 was at a premium of 30 yuan/mt against the SHFE aluminum 2505 contract, up 20 yuan/mt from the previous trading day. SMM A00 aluminum ingots were recorded at 19,800 yuan/mt, up 120 yuan/mt from the previous trading day. In central China, after aluminum prices rebounded, downstream purchasing weakened, while upstream suppliers were actively selling, releasing some inventory. Market premiums collapsed and weakened. SMM central China A00 was recorded at 19,720 yuan/mt against the SHFE aluminum 2505 contract, up 100 yuan/mt from the previous trading day. The Henan-Shanghai price spread was -50 yuan/mt. Actual market transactions were at parity to a discount of 10 yuan/mt against SMM central China prices, and at a discount of 20 yuan/mt against the 2504 contract.
Secondary aluminum raw materials: Yesterday, spot primary aluminum rose 120 yuan/mt from the previous trading day, with SMM A00 spot closing at 19,800 yuan/mt. The aluminum scrap market saw little overall price change yesterday, with downstream demand not showing a clear peak season trend, maintaining purchasing as needed. Yesterday, baled UBC was quoted at 14,900-15,500 yuan/mt (excluding tax), and shredded aluminum tense scrap was quoted at 15,850-17,350 yuan/mt (excluding tax). By region, Hunan, Hubei, Foshan, and Jiangxi adopted a steady strategy, not following the primary aluminum market for significant price adjustments. Other regions such as Shanghai, Jiangsu, Henan, and Anhui followed A00 prices. By product, shredded aluminum tense scrap and wheel hub removed from vehicle prices were flat from the previous trading day, while baled UBC rose 100-150 yuan/mt. In the short term, the high aluminum scrap prices are mainly due to the low operating rates of downstream scrap utilization enterprises and tight domestic aluminum tense scrap circulation, supporting scrap prices. The price difference between A00 aluminum and aluminum scrap was mainly adjusted in a narrow range.
Secondary aluminum alloy: The secondary aluminum alloy market remained stable this week. As of April 17, the SMM ADC12 price was flat WoW at 20,600 yuan/mt. In terms of demand, aluminum price fluctuations narrowed WoW, and prices gradually stabilized, so downstream purchasing sentiment improved slightly, but overall, rigid demand purchasing remained dominant. The end-use consumer market continued to be weak, facing order shrinkage and destocking pressure, forcing some secondary aluminum plants to cut prices and profits, exacerbating profit margin compression. Also, attention should be paid to recent tariff policy adjustments, which may suppress domestic die-casting enterprises' exports. On the supply side, constrained by weak demand and high costs, secondary aluminum plants' operating rates continued to decline and remained under pressure in the short term. In terms of imports, overseas ADC12 quotations remained stable at $2,450-2,470/mt this week, with immediate losses for imported ADC12 remaining in the range of 700-900 yuan/mt. Overall, under the dominance of weak demand, ADC12 prices will remain in the doldrums in the short term, with a focus on aluminum raw material price fluctuations and the transmission effect of tariff policies on export orders.
Summary: On the macro front, as the European Central Bank continued to cut interest rates, the US dollar index stabilized, finally closing at 99.44, up 0.18%. During the period, Trump announced "US tariffs on certain Chinese goods increased to 245%", and China stated that the US has weaponized tariffs to an irrational extent, and China will not respond. It can be seen that US tariff uncertainty remains, and global trade barriers are increasing, which may have a negative impact on China's export business in the short term. The domestic macro favorable atmosphere remains unchanged, promoting the recovery of domestic demand. On the fundamentals, domestic aluminum operating capacity remained stable, and the resumption of production capacity in Sichuan and Chongqing has been fully resumed and output has been achieved. The cost side of the aluminum industry rebounded slightly this week. As of Thursday, the domestic aluminum immediate full average cost was about 16,552 yuan/mt, down 18 yuan/mt WoW, mainly due to the continued decline in alumina prices, with aluminum costs slightly down 0.1%. On the demand side, domestic aluminum ingot social inventory destocking was significant, providing strong support for aluminum prices and spot premiums/discounts. According to SMM statistics, on April 17, domestic aluminum social inventory was 689,000 mt, down 35,000 mt WoW from Monday, stimulating downstream stocking sentiment after prices fell. Entering mid-to-late April, some aluminum processing sectors' subsequent orders showed a downward trend compared to the previous peak season, mainly due to the end of the PV installation rush, with some companies reporting that the operating rate may decline next week. Coupled with the impact of overseas tariff uncertainty, some sectors reported that overseas purchasing sentiment has re-emerged, and subsequent export orders may be affected. Overall, on the macro front, the escalation of the tariff war has led to bearish sentiment. On the fundamentals, domestic aluminum ingot inventory destocking provides support for aluminum futures and spot premiums. In the short term, the operating rate of the aluminum processing sector in April remains high, but subsequent orders are expected to decline, and domestic aluminum prices are expected to fluctuate.
【The information provided is for reference only. This article does not constitute direct advice for investment research decisions. Clients should make decisions cautiously and not use this to replace independent judgment. Any decisions made by clients are not related to SMM.】
