[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.

According to the latest market news:South 32 revised Q2 ‘2026 CIF MJP Premium offer is US$353/mt.

SMM February 28: According to SMM statistics, overseas aluminum production in February 2026 increased 2.5% YoY; new aluminum projects in Indonesia and Angola continued ramping up, with overseas daily average production rising 0.9% MoM. On February 17, 2026, Alba released its Q4 and annual report for 2025. The report showed Alba’s production hit a record high of 1,623,139 mt in 2025, exceeding targets despite a fire incident at year-end. The affected production line is currently in the recovery phase. On February 19, 2026, Century Aluminum announced its Q4 results. The report indicated primary aluminum shipments fell 14% QoQ in Q4 2025, mainly due to production declines caused by equipment failure at its Iceland plant. In 2026, the 50,000 mt idle capacity at Mt. Holly is expected to resume production in April, reaching full capacity by the end of Q2; the Iceland plant is expected to restart earlier than planned, now scheduled to begin production resumptions by the end of April 2026 and approach full capacity by the end of July. South 32’s performance report maintained Mozal aluminum smelter’s FY2026 production guidance at 240,000 mt, with the plant expected to begin maintenance shutdown from March 15. However, foreign media reported the government is taking necessary measures to maintain Mozal’s operations. SMM will continue monitoring. Looking ahead to March 2026, operating capacity at new aluminum projects in Indonesia and Angola is expected to continue climbing, but production cuts or shutdown risks at the Mozambique plant may cause daily average aluminum production to turn negative. Nevertheless, high aluminum prices continue to stimulate global aluminum supply acceleration, with the Iceland plant’s restart expected ahead of schedule and other plants slightly increasing operating rates. Overall, aluminum supply is expected to maintain growth, though global aluminum inventory trends warrant ongoing attention.

SMM February 28 News: According to SMM statistics, overseas aluminum production totaled in February 2026 increased 2.5% YoY; new aluminum projects in Indonesia and Angola continued ramping up, with the overseas daily average production up 0.9% MoM. On February 17, 2026, Alba released its Q4 and annual report for 2025. The report showed that Alba's production hit a record high of 1,623,139 mt in 2025, exceeding targets despite a fire accident at year-end 2025. The production line affected by the fire is currently in the recovery phase. On February 19, 2026, Century Aluminum announced its Q4 results. The report indicated that primary aluminum shipments in Q4 2025 fell 14% QoQ, mainly due to production declines caused by equipment failure at the Iceland aluminum plant. In 2026, the 50,000 mt idle capacity at the Mt. Holly plant is expected to resume production in April, reaching full capacity by the end of Q2; the Iceland plant is expected to restart earlier than originally planned, now scheduled to begin production resumptions by the end of April 2026 and recover to near full capacity by the end of July. South 32's performance report showed that the Mozal aluminum plant in Mozambique maintained its FY2026 guidance production of 240,000 mt, meaning the Mozal plant is expected to transition into maintenance shutdown from March 15. However, foreign media reported that the government is taking necessary measures to keep the Mozal plant operating. SMM will continue monitoring. Looking ahead to March 2026, operating capacity at new aluminum projects in Indonesia and Angola is expected to continue climbing, but the Mozal plant faces risks of output reduction or shutdown. Affected by this, daily average aluminum production may turn to negative growth. Nevertheless, high aluminum prices continue to stimulate global aluminum supply acceleration; the Iceland plant's production resumption is expected earlier than planned; other plants also slightly increased operating rates. Overall, aluminum supply is expected to maintain growth, and global aluminum inventory trends need ongoing attention. [Data Source Statement: Except for public information, other data are processed by SMM based on public information, market communication, and SMM's internal database model, for reference only and not constituting decision-making advice.] Data Source: SMM (Guo Mingxin 021-20707919)

[SMM Aluminum Morning Meeting Minutes: Expectations for US Fed Interest Rate Hike Heat Up, Aluminum Prices to Move Sideways in the Short Term] Overall, from a macro perspective, rising short-term expectations for US Fed interest rate hikes are pushing up the US dollar, while geopolitical tensions between the US and Iran and tariff policies are intensifying risk aversion. Coupled with a slowdown in US economic resilience and a weak recovery in the eurozone, the global macro environment is characterized by a fragile balance and high fluctuations. Seasonal pressure from the fundamentals is becoming more pronounced. On the supply side, new aluminum projects domestically and overseas are steadily ramping up production. Demand side, attention should be paid to the pace of downstream enterprise resumptions after the holiday. Currently, due to seasonal oversupply, the market widely expects post-holiday inventory peaks to reach 1.3 million mt, hitting a five-year high, which will be a key factor suppressing prices. Overall, aluminum prices are expected to move sideways in the short term.

According to foreign media reports, Mozambique's Minister of Mineral Resources and Energy, Estevao Pale, stated on Monday that the government is taking all necessary measures to ensure the continued operation of the Mozal aluminum smelter owned by Australia's South32. The minister made these remarks to reporters on the sidelines of a conference in Cape Town, South Africa. In December, South32 indicated that due to the failure to reach a power agreement with the Mozambican government, its Mozal plant would enter a maintenance state by March, which would also incur a one-time cost of $60 million.

[South32 to Scale Back Mozal Aluminium Investment Amid Power Supply Concerns] South32 has announced it will reduce investment in its Mozal aluminium smelter in Mozambique, citing uncertainty over electricity supply beyond March 2026. Starting this month, the company will halt pot relining and stand down related contractors. Without a new power agreement, the company warns Mozal may be placed under care and maintenance once the current electricity deal expires. South32 expects a US$372 million loss for FY25 from the site, reflecting the high likelihood of operations stopping after the current power supply ends. Despite ongoing talks with the Government of Mozambique, Hidroeléctrica de Cahora Bassa, and Eskom, South32 stated there is no assurance of securing a sufficient and affordable electricity supply. As a result, FY26 production is projected to fall to 240kt, consistent with reduced operating potlines.

[SMM Flash News] South 32 released its Q2 2025 report, which showed that the company's zinc concentrate production for the quarter was 10,600 mt, down 3% MoM and 39% YoY.

This week, manganese ore offers remained consolidated, with actual transaction prices declining. South 32's Australian manganese ore arrived at the port this week, leaving room for profit margins and not lacking in low-priced shipments. The fluctuation range of other ore types narrowed, but the volume of transactions remained low. In the short term, manganese ore prices are expected to remain in the doldrums. The imported coal market operated steadily. The support of manganese sulphate costs to market conditions was weak, with limited procurement orders from the downstream market, suppressing the demand for manganese sulphate price increases. Under the situation of supply surplus, continuous attention needs to be paid to the demand guidance of precursors.

[GEMCO Manganese Operation Resumes Exports, Marking Key Milestone in Cyclone Recovery] In June, GEMCO from South 32 has officially resumed export sales of manganese ore, marking a significant milestone in its recovery from Tropical Cyclone Megan, which struck in March 2024. The first shipment is currently being loaded at GEMCO’s newly reconstructed wharf and is expected to depart in the coming days. Cyclone Megan brought record rainfall of 681 mm and the strongest wind gusts seen in over 20 years, causing severe flooding of mining pits and major damage to infrastructure. This led to the temporary suspension of operations at the GEMCO site. Recovery efforts began promptly once conditions were safe, including dewatering the flooded pits and repairing or replacing damaged infrastructure. The GEMCO team also worked closely with the Groote Eylandt community to support local recovery efforts, focusing on restoring essential services, supply delivery, and critical infrastructure. Export volumes are expected to ramp up over the June 2025 quarter and return to normalised levels over FY26 (July 2025–June 2026).