SMM News, March 19: SHFE aluminum 2603 fluctuated downward in early trading, with the price center falling sharply from the previous trading day. Affected by the decline in aluminum prices, overall purchasing sentiment rose today. Sellers held prices firm, and today’s market mainstream quotations and transaction prices were mainly concentrated around the average price to +10 yuan/mt. Today, the shipment sentiment index in east China was 3.24, up 0.08 MoM; the purchasing sentiment index was 3.16, up 0.13 MoM. Today, SHFE aluminum futures prices extended losses, and buying sentiment in the central China market was strong. Traders and downstream processing enterprises were both bullish and tended to purchase at low prices with moderate stockpiling. Meanwhile, suppliers showed a strong willingness to hold prices firm, and transaction premiums showed no sign of weakening. In the end, quotations in the central China market were mainly concentrated at premiums of 10-40 yuan over the central China price, while actual transaction prices were mainly concentrated at premiums of 20-30 yuan over the central China price. Today, the shipment sentiment index in the central China market was 2.59, flat MoM; the purchasing sentiment index was 2.43, up 0.01 MoM. Inventory side, aluminum ingot inventory in major consumption regions increased by 3,000 mt MoM today, with inventory buildup seen across all three regions. In the short term, aluminum ingot inventory continued seasonal inventory buildup after the Chinese New Year. Affected by bullish sentiment, premiums are expected to remain on a narrowing trend.

[SMM Cast Aluminum Alloy Morning Comment: Overnight Aluminum Futures Closed Lower, Spot Cargo Under Short-Term Pressure] On Wednesday, the ADC12 market generally showed a downward trend, with mainstream producers broadly lowering quotes by 100 yuan/mt. This price adjustment was mainly driven by the pullback in aluminum prices, which weakened cost support. Enterprises accordingly adjusted their quotes in line with market changes, but the overall magnitude of the adjustment remained relatively restrained, indicating a rather cautious market sentiment.

[Macro Pressures Combined With High Inventory, SHFE Aluminum Remained Under Pressure at Elevated Levels in the Short Term] Continued destocking in LME inventory provided bottom support for LME aluminum, but amid tightening fund liquidity and profit-taking by bulls, upward momentum was insufficient, and the backwardation structure weakened somewhat. In China, social inventory rose to a high for the same period in nearly five years, and the inventory buildup cycle had not ended. High inventory and weak spot fundamentals jointly weighed on upward momentum. The divergence between domestic and overseas drivers continued, the SHFE/LME price ratio kept weakening, and SHFE aluminum fell below the key threshold of 25,000 yuan/mt, remaining mainly under pressure at elevated levels in the short term.

SMM Morning Meeting Summary: Overnight, LME copper opened at $12,714.5/mt and climbed to $12,715/mt at the start of the session. Copper prices then saw the center move straight downward, before fluctuating rangebound and eventually closing at $12,340/mt, down 3.44%. Trading volume reached 33,600 lots, and open interest stood at 288,300 lots, down 4,872 lots from the previous trading day, mainly due to long position liquidation. Overnight, the most-traded SHFE copper 2605 contract opened at and touched a high of 98,000 yuan/mt, after which the center of copper prices moved straight downward to a low of 95,920 yuan/mt, then fluctuated upward and finally closed at 96,340 yuan/mt, down 2.58%. Trading volume reached 103,000 lots, and open interest stood at 198,000 lots, up 9,911 lots from the previous trading day, mainly due to increased short positions.

[SMM Tin Midday Review: Resonance Between Macro Pressures and Supply Recovery Kept SHFE Tin Under Pressure and Continued to Weaken]

Today, spot #1 copper cathode in North China was quoted at a discount of 40 yuan/mt to a premium of 40 yuan/mt against the front-month contract, with the average premium/discount at parity, up 60 yuan/mt from the previous trading day. The average transaction price was 95,645 yuan/mt, down 3,375 yuan/mt from the previous trading day.