[SMM Analysis]Weak Supply-Demand Pattern; Secondary Aluminum Prices Were Expected to Come Under Pressure and Pull Back in April

Recently, construction officially began on the high-end rare earth aluminum alloy project in the Baotou Jinshan Economic Development Zone, with a total investment of approximately 500 million yuan and annual output of 100,000 mt. The project will be advanced in an orderly manner in two phases. Phase I will build a 30,000 mt high-end rare earth aluminum alloy production line, focusing on technology R&D and capacity release to rapidly achieve scaled-up production. Phase II will expand capacity by 70,000 mt, further extend, supplement, and strengthen the industrial chain, optimize the product mix, increase added value, and support Guyang in building a distinctive high-end rare earth aluminum alloy industrial cluster.

On March 29, the groundbreaking ceremony was held for the non-production supporting facilities of the 91,000 mt high-performance aluminum alloy cast-rolled coil project undertaken by China Second Metallurgical Group. This marked the official launch of the project’s construction and its entry into the substantive construction phase.

An investor asked on the interactive platform: What is the commissioning status of the Anhui Phase II project and the subsequent commissioning plan? On April 1, Shunbo Alloy stated that the Anhui Phase II project planned an annual production project of 630,000 mt of low-carbon, environmentally friendly aluminum alloy slab ingots and an annual production project of 500,000 mt of green, recycled, high-performance aluminum plate/sheet and strip. According to the Prospectus, from 2026 to 2028, the sales volume of aluminum plate/sheet and strip is expected to reach 120,000 mt, 240,000 mt, and 400,000 mt, respectively. The specific situation is subject to the company’s subsequent relevant announcements.

[Worsening Supply Concerns and Gradual Demand Recovery Stabilize the Center of Aluminum Prices with Geopolitical Premiums ]Overall, the market's core focus in the period ahead is on whether key aluminum smelters in the Middle East will further expand production cuts. If the cuts continue to materialize, they will provide strong upward momentum for global aluminum prices, coupled with support from expectations of a gradual release of demand during China’s peak season. In the short term, aluminum prices are expected to remain in a high-level consolidation pattern.

[SMM Cast Aluminum Alloy Morning Comment: Slightly Pessimistic Demand Expectations Cap Upside Room for ADC12 Prices]: On Thursday, ADC12 market prices remained largely stable. Downstream procurement is currently staying cautious, and overall market transactions were mediocre. Some enterprises are pessimistic about April order expectations, with wait-and-see sentiment intensifying and demand continuing to provide weak support for prices. The market’s primary contradiction has shifted from raw material cost-driven factors to insufficient consumption momentum. The increase in finished alloy ingot prices has clearly lagged behind the raw material side, and industry profit margins have consequently narrowed.