[Expectations for US Fed Interest Rate Hikes Delayed, Short-Term Weakness in Aluminum Prices Hard to Break] In China, the proportion of liquid aluminum continued to rise, and warehouse withdrawals of aluminum ingots hit a four-year high in the past week. The further acceleration of the destocking pace has been the biggest highlight recently, but the absolute inventory level remains in a high range. Recently, with the continued narrowing of the geopolitical risk premium coupled with expectations for new project startups outside China, macro headwinds still dominate. LME aluminum is under significant pressure in the short term, and domestic aluminum prices are expected to follow LME aluminum and remain in the doldrums.

[Geopolitical Risk Premium Continues to Narrow, Aluminum Prices in the Doldrums] Progress has been made in indirect technical talks between the US and Iran, with discussions on fund repatriation and Strait security. Consultations on the nuclear issue are about to begin. The geopolitical risk premium continues to narrow. The dispute over management rights of the Strait of Hormuz persists, and uncertainty remains over the resumption of Strait navigation. The Federal Reserve's hawkish pivot boosted the US dollar index, weighing on nonferrous metal prices. Under macro headwinds, aluminum prices fell in and outside China. In the short term, bearish factors dominate, and aluminum prices are expected to stay in the doldrums.

[Strait of Hormuz Control Dispute Continues; Bearish Factors Dominate Short-Term Aluminum Prices] The Strait of Hormuz control dispute continues, and the resumption of navigation in the strait remains uncertain. The US Fed’s hawkish pivot boosted the US dollar index, and non-ferrous metal prices were suppressed. Under macro headwinds, aluminum prices in and outside China fell. In the short term, bearish factors dominate, and aluminum prices are expected to remain in the doldrums.

[SMM Aluminum Alloy Daily Review] SMM ADC12 price rose 100 yuan/mt from the previous day to 23,950 yuan/mt, with the market center moving further upward. The core driver behind the price increase remained the cost side, as aluminum scrap prices stayed high, tight supply of compliant raw materials and persistent tax invoice cost pressure kept enterprise production costs elevated. Although downstream demand was mediocre, with limited incremental orders, and downstream procurement was still mainly based on essential restocking, enterprises were more consistent in their willingness to hold prices firm amid strong cost support. In the short term, with no clear improvement in demand, the momentum for a substantial further rise in ADC12 price is limited, but cost support remains relatively strong

[SMM Aluminum Alloy Daily Review] SMM ADC12 price rose 100 yuan/mt from the previous day to 23,950 yuan/mt, with the market center moving further upward. The core driver behind the price increase remained the cost side, as aluminum scrap prices stayed high, tight supply of compliant raw materials and persistent tax invoice cost pressure kept enterprise production costs elevated. Although downstream demand was mediocre, with limited incremental orders, and downstream procurement was still mainly based on essential restocking, enterprises were more consistent in their willingness to hold prices firm amid strong cost support.

[Macro Headwinds Dominate Futures; SHFE and LME Aluminum Both Remain in the Doldrums] The US Fed’s hawkish pivot boosted the US dollar index, weighing on nonferrous metal prices. The Middle East geopolitical situation showed some volatility but no signs of deterioration. Under macro headwinds, aluminum prices in and outside China fell. In the short term, bearish factors dominate, and aluminum prices are expected to remain in the doldrums. Continued attention should be paid to production resumptions in the Middle East, overseas aluminum ingot inventory trends, and macro news fluctuations.