[Ceasefire Unlikely to Resolve Supply Weakness; Aluminum Prices Retain Strong Support at High Levels] Overall, the two-week ceasefire news was unable to reverse the firm pattern underpinned by substantive supply damage and low inventory. Expectations of tangible supply contraction triggered by attacks on Middle Eastern aluminum smelters, combined with low global inventory and the recovery of peak-season demand in China, will provide strong upward momentum for aluminum prices. In the near term, aluminum prices are expected to hold up well.

SMM April 7 update: SHFE aluminum 2604 fluctuated upward in the morning session, with the price center moving lower than the previous day. As the delivery date approached, some traders purchased to earn the price spread between futures contracts. Combined with limited shipments from smelters, market transactions gradually picked up. Transactions were mainly concentrated between the SMM A00 aluminum discount average price and a premium of 20 yuan/mt. The east China market shipment sentiment index was 3.31 today, down 0.03 MoM; the purchasing sentiment index was 3.64, up 0.09 MoM. Before the market opened, central China traders' quotes continued the trend from the previous trading day, but prices edged slightly lower later. Excessive market inventory limited price increases, and with aluminum prices at elevated levels, the lack of peak-season characteristics in end-user orders constrained downstream manufacturers' buying sentiment, resulting in an overall sluggish trading atmosphere. Ultimately, actual transaction prices in the central China market ranged from parity to a premium of 30 yuan over the central China price. The central China market shipment sentiment index was 2.7 today, unchanged MoM; the purchasing sentiment index was 2.46, down 0.03 MoM. Inventory side, aluminum ingot inventory in major consumption regions increased by 27,500 mt MoM today, with all three regions showing inventory buildup.

[Concerns Over Supply Shortfalls Triggered by Attacks on Middle Eastern Aluminum Plants Give Aluminum Prices Strong Upward Momentum] Overall, expectations of a substantive supply contraction triggered by attacks on Middle Eastern aluminum plants, combined with low global inventory and a recovery in peak-season demand in China, will provide strong upward momentum for aluminum prices. In the short term, aluminum prices are expected to break out of their trading range and hold up well.

SMM, April 3: In early trading, SHFE aluminum 2604 fluctuated upward, while its center moved lower than the previous day. Supported by downstream pre-holiday restocking, buying sentiment rose sharply today, prompting sellers to lift quotes. Market transactions were mainly concentrated from the average discount of SMM A00 aluminum to a premium of 20 yuan/mt. Today, the shipments sentiment index in the east China market was 3.34, down 0.09 MoM; the purchasing sentiment index was 3.55, up 0.54 MoM. In the central China market, downstream restocking sentiment was strong, and purchasing sentiment exceeded shipments sentiment, prompting sellers to lift quotes and driving market offers and transaction prices higher throughout the day. Ultimately, actual transaction prices in the central China market were around a premium of 30-40 yuan/mt over the central China price. Today, the shipments sentiment index in the central China market was 2.7, down 0.09 MoM; the purchasing sentiment index was 2.49, up 0.06 MoM. Inventory side, aluminum ingot inventory in major consumption regions fell by 2,000 mt MoM today, with destocking mainly coming from Wuxi and Gongyi.

[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 Aluminum Price Weekly Review: Geopolitical Disruptions Dominate, and the Pattern of Elevated Aluminum Prices Continues]

SMM News, Apr 2: In early trading, SHFE aluminum 2604 fluctuated upward, with its center moving higher than the previous day. Affected by elevated aluminum prices, shipping sentiment was stronger than buying sentiment, while end-user downstream purchase sentiment was weak and spot cargo circulation was relatively ample. Market transactions were mainly concentrated at discounts of 10 yuan/mt to the SMM A00 aluminum average price. Today, the east China market shipping sentiment index was 3.43, up 0.02 MoM; the purchasing sentiment index was 3.01, up 0.01 MoM. Aluminum futures prices remained elevated, but in the central China market, traders were overall more bullish than bearish. Although downstream orders were not enough to support excessive stockpiling, traders were relatively active in purchasing for hedging purposes. After the initial stage, shipments from sellers declined, while higher-bid purchasing increased, driving market quotes and transaction prices all the way up. Ultimately, actual transaction prices in the central China market ranged from a discount of 40 yuan/mt to the central China price to a premium of 10 yuan/mt over the central China price. Today, the central China market shipping sentiment index was 2.79, up 0.03 MoM; the purchasing sentiment index was 2.44, up 0.02 MoM. Inventory side, aluminum ingot inventory in major consumption regions increased by 2,000 mt from the previous period today, with Guangdong as the main source of the inventory buildup. In the short term, aluminum ingot inventory continued its seasonal buildup after the Chinese New Year. Affected by bullish market sentiment, premiums are expected to maintain a narrowing trend.

[China’s Aluminum Ingot Inventory Continues to Build Up, Aluminum Prices Remain in a High-Level Consolidation Pattern ]Overall, the geopolitical situation in the Middle East remained the core factor affecting the global aluminum market. A series of production cuts and damage incidents at Middle Eastern aluminum plants is expected to provide strong upward momentum for aluminum prices in and outside China, coupled with support from expectations of a gradual release of peak-season demand in China. In the short term, aluminum prices are expected to remain in a high-level consolidation pattern.

SMM News, April 1: In early trading, SHFE aluminum 2604 fluctuated downward, with its center holding flat from the previous day. Affected by elevated aluminum prices, downstream purchasing enthusiasm was not high, with procurement mainly based on orders and little inventory buildup. Market sentiment to ship was relatively strong, and spot availability was ample, driving a wider spread in market transaction premiums. Market transactions were mainly concentrated at discounts of 10 yuan/mt to the SMM A00 aluminum average price. Today, the east China market shipment sentiment index was 3.41, up 0.1 MoM; the buying sentiment index was 3, down 0.11 MoM. With the arrival of the first trading day of April, downstream processing enterprises in the central China market entered a new order cycle, and purchase sentiment improved significantly from the previous day, driving a simultaneous increase in traders' purchase volumes. Market trading turned more active, and overall trading volume rose sharply. As trading volume increased, market transaction prices gradually moved higher, with actual transaction prices in the central China market ultimately hovering around parity to a discount of 40 yuan against the central China price. Today, the central China market shipment sentiment index was 2.76, up 0.02 MoM; the buying sentiment index was 2.42, up 0.1 MoM. Inventory side, aluminum ingot inventory in major consumption regions increased by 3,500 mt from the previous period today, with the inventory buildup mainly coming from Gongyi and Guangdong. In the short term, after the Chinese New Year, aluminum ingot inventory continued its seasonal buildup. Affected by bullish sentiment, premiums were expected to maintain a narrowing trend.

[SHFE Aluminum Night Session Closed Higher, with Geopolitics and Fundamentals Jointly Supporting Aluminum Prices] Overall, the geopolitical situation in the Middle East remained the core factor affecting the global aluminum market. A series of production cuts and damage incidents at Middle Eastern aluminum plants is expected to provide strong upward momentum for aluminum prices in and outside China, together with support from expectations of the gradual release of peak-season demand in China. In the short term, aluminum prices are expected to remain in a high-level consolidation pattern.