Global Aluminum Market Review – April: Divergent Domestic & Overseas Trends and Marked Spot Structure Disparities The global aluminum market in April featured a core pattern of strength overseas and weakness domestically with diverging trends. The main Shanghai aluminum contract retreated from highs amid fluctuations, while LME aluminum maintained firm momentum supported by low inventories and geopolitical factors, with both markets seeing mild corrections toward month-end. Market drivers this month centered on macro policies, geopolitical conflicts, supply-demand fundamentals and inventory structures, with movements of key indicators further highlighting supply-demand imbalances between domestic and overseas aluminum markets. I. April Aluminum Price Review: Linked Movements with Distinct Strength Differentials Shanghai aluminum and LME aluminum shared similar price rhythms in April, both fluctuating higher initially before retreating. However, notable gaps emerged in upward momentum and correction ranges, with overseas aluminum prices significantly outperforming domestic counterparts. The average Shanghai-LME aluminum ratio dropped from 7.36 in March to 7.03 in April, reflecting stronger overseas aluminum pricing relative to Shanghai aluminum. The main Shanghai aluminum contract trended upward early in the month before softening overall, declining from elevated levels through range-bound trading. It opened lower at RMB 24,715 per ton at the start of the month and consolidated. Driven by escalating Middle East geopolitical tensions and rising LME aluminum prices, it surged to a monthly peak of RMB 25,675 per ton in mid-April. In late April, amid continuous domestic inventory accumulation, weaker-than-expected downstream demand, and risk-averse capital outflows ahead of the May Day holiday, prices corrected steadily. Closing at RMB 24,430 per ton on April 30, the contract recorded a monthly trading range of nearly RMB 1,360 per ton. LME March aluminum traded firmly with mild late-month declines. Opening at USD 3,459 per ton, it climbed to a monthly high of USD 3,672 per ton in mid-April, underpinned by overseas supply disruptions from geopolitical frictions and sustained inventory destocking. Prices edged down later due to fluctuating US-Iran negotiations, hawkish macro sentiment and profit-taking at high levels, settling at USD 3,476 per ton at month-end with a slight monthly loss. Overall, LME aluminum vastly outperformed domestic Shanghai aluminum. In terms of price drivers, geopolitics served as a shared upward catalyst for global aluminum prices, with production cuts and supply disruptions in the Middle East continuously boosting market risk aversion. Price divergence stemmed from dual disparities in macro policies and fundamentals: elevated domestic inventories and sluggish demand consistently capped aluminum price rebounds, while tight overseas inventories and strained spot supplies provided robust support for LME aluminum. II. Key Inventory Indicators: Divergent Inventory Movements and Contrasting Supply-Demand Landscapes As a core gauge of aluminum market supply and demand, domestic and overseas inventory trends diverged sharply in April, directly shaping the relative strength of regional aluminum prices. Domestic aluminum inventories kept rising and stood at a multi-year seasonal high. Social inventories maintained an upward trend throughout April, hitting 1.465 million tons in mid-month, the highest seasonal level in five years. A clear imbalance emerged between rigid supply release and lackluster downstream demand during the traditional peak "Silver April" period, leading to persistent spot market loosening. SHFE warehouse stocks expanded from 420,000 tons at the start of the month to 450,000 tons at month-end. Elevated warehouse stock levels further confirmed ample domestic spot supply, weighing continuously on aluminum prices. Overseas LME aluminum inventories declined steadily to a 20-year low. Total LME aluminum inventories fell from 410,000 tons to 370,000 tons in April, extending months of destocking to historic lows. Noticeable structural divergence persisted in inventory composition: Russian aluminum accounted for approximately 92% of total LME stocks in March, resulting in low market-circulating inventories and increasingly tight physical spot supply, which acted as the fundamental pillar for strong LME aluminum prices. In summary, April’s global aluminum market was governed by contrasting core dynamics: low overseas inventories, geopolitical disruptions and hawkish Federal Reserve policies on the overseas front, versus high domestic inventories, weak real demand and stable growth expectations domestically. This drove pronounced market divergence. Affected by intertwined internal and external factors, the main Shanghai aluminum contract corrected downwards from highs, while LME aluminum remained in a firm trading range, backed by historically low inventories, a tight spot balance and geopolitical risk premiums.

Scrap tightening and a major nickel-cobalt producer's output cut pushed SHFE stainless steel to levels not seen since 2023 — yet physical demand remains conspicuously absent heading into the May Day break

Spot market: SMM #1 lead ingot prices remained stable from the beginning of the week through mid-week, then declined toward the weekend. Ahead of the Labour Day holiday, downstream stocking willingness was subdued, with only sporadic rigid-demand purchases. Wait-and-see sentiment was strong, and overall spot order trading was sluggish. By region, Henan was dominated by long-term contract deliveries, with traders offering discounts of 200-130 yuan/mt against the SHFE lead 2606 contract, and transactions at high prices were lackluster. In Hunan, spot order premiums narrowed from 0-30 yuan/mt to 0-20 yuan/mt, with some traders making shipments at slight discounts. Jiangxi quotes remained firm, with premiums pulling back from 150 yuan/mt to 120 yuan/mt. In Guangdong, ex-factory premiums continued to decline throughout the week, narrowing from 70-80 yuan/mt to 30-50 yuan/mt. Overall, lead prices were stable early in the week before weakening. Smelters' sentiment to hold prices firm gradually softened with some price concessions, but downstream rigid demand weakened ahead of the holiday, the tug-of-war between sellers and buyers intensified, and spot cargo transactions were mediocre overall.

SMM April 30: SHFE lead fluctuated this week, with prices pulling back slightly near the weekend. On the raw material side, scrap battery procurement prices were largely stable overall, with only a few smelters in east China and north China making slight reductions early in the week. Current scrap battery retirement volumes remain at low levels, with tight supply for both recyclers and smelters. Smelter arrivals declined significantly WoW this week, with raw material inventory maintained at low levels of only 1-2 weeks. Combined with recyclers generally taking 2-6 days off for the Labour Day holiday, short-term supply circulation is expected to be further constrained. Looking ahead to next week, smelter procurement prices are expected to remain largely stable: upward adjustments are constrained by finished lead profit pressure, while downward adjustments are supported by low raw material inventory, leaving limited room for fluctuations in either direction.

The share of EQ copper cathode in imports continued to expand in Q1 2026. Following shares of 68.12% and 70.78% in January and February respectively, the EQ share further climbed to 73.53% in March. Looking at the seasonal charts from 2022 to 2026, March tends to be the annual peak for EQ share. This year's 73.53% not only exceeded the same period in 2024 and 2025, but also confirmed that under the reality of inverted SHFE/LME price ratio and import windows under pressure, EQ sources have further consolidated their position as the "main force" of China's copper cathode imports. Supply side, the previously noted "African source diversion" phenomenon was confirmed in March data. As the US increased its stockpiling of global copper cathode resources, changes in the flow of African sources remain worth monitoring. Taking DRC as an example, its March supply rebounded from 64,900 mt in February to 93,100 mt, but still fell short of January's level. This indicates that although African sources previously affected by logistics and other factors have partially recovered, under the backdrop of global resource reallocation and long-term contract diversions by multinational giants, the incremental space for DRC copper cathode flowing into China is constrained, and the price spread between EQ and registered copper continues to narrow. Unlike the supply situation of African sources, Russian and Kazakh sources saw significant growth in March. Breaking the previously relatively stable monthly import trend, Russia's copper cathode imports rose to 49,700 mt in March, a notable increase MoM, while Kazakhstan also rose to 13,900 mt. These additional EQ resources effectively filled the gap left by constrained African sources. Considering that sulfur supply and shipping capacity issues in Africa have not been fully resolved, the incremental flow of African SX-EW copper to China is expected to remain limited going forward. However, given the overall limited imports, the share of EQ copper imports is expected to remain elevated.

High copper prices, ample supply, weak demand, inventory buildup, weak structure ↓ Falling copper prices, still ample supply, good demand, destocking, slightly stronger structure ↓ Fluctuating copper prices, relatively tight supply, demand fluctuating with copper prices, high probability of destocking, high probability of strengthening structure Q1 2026 has ended, and April trading days are also about to end. The above two sentences summarize SHFE copper futures and spot market performance. Note that this refers only to copper cathode supply, as China saw significant production increases in 2025. Despite continued ore tightness, production in 2026 has also remained fluctuating at highs, keeping copper cathode supply persistently ample. Demand side, although annual demand showed growth, when broken down to monthly or even daily levels, demand was significantly influenced by copper prices. Amid copper price fluctuations, secondary copper was the "active player" — when copper prices were high, secondary copper shipments increased, benefiting both supply and demand sides; when copper prices fell, secondary copper shipments decreased, reducing some raw material supply for both supply and demand. So recently the spot market appeared to have tight supply. Smelters began shifting to "high prices with high volumes" in shipments. Against the backdrop of continued destocking and concentrated smelter maintenance, can premiums "heat up"? The chart above shows that from a macro perspective, copper prices and Shanghai spot copper premiums exhibited a clear inverse correlation in recent years. However, from a detailed perspective, Shanghai spot copper premiums have recently shown signs of "picking up" under high copper prices. 1. Although inventory continued destocking, the current warrant-to-inventory ratio remained elevated (this indicator is highly correlated with structure). The SHFE copper near-month structure has not shown a sustained backwardation structure to provide guidance for future premiums. 2. Although copper prices returned to highs, overall secondary copper shipment sentiment remained subdued, providing limited supplementation to copper cathode production and consumption. Previously, the price difference between primary metal and scrap was inverted, which favored copper cathode consumption. During this process, non-registered supply supplementation was limited, and the price spread between non-registered and SX-EW copper also narrowed. Imported copper supplementation within the year decreased YoY compared to previous years. Taking DRC as an example, non-registered supply was also diverted. Overall, substitutes for registered copper cathode decreased. 3. Copper cathode supply itself is about to decrease in the coming months, with concentrated maintenance currently underway in the market. Social inventory is expected to further decline. As inventory decreases and the warrant-to-inventory ratio declines, the far-month structure has already shifted to backwardation. China's spot premiums are also expected to pick up in the near term. It has been observed that Guangdong spot premiums have been consistently higher than other regions nationwide for several consecutive days. Downstream buyers in Jiangsu, Zhejiang, Shanghai, and Anhui have recently tended to purchase from direct producers and traders with inventory who can issue invoices for the current month. Shanghai spot copper premiums are expected to see a small spike before the Labour Day holiday. After the holiday, as domestic supply decreases, premiums are expected to gradually firm up. However, the warrant-to-inventory ratio remains relatively high, and a sustained shift to backwardation in the structure still requires patience.

SMM, April 30: The most-traded SHFE lead 2606 contract opened at 16,660 yuan/mt intraday. Prices moved sideways within 16,605-16,665 yuan/mt in early trading, dipped slightly in later trading to a low of 16,575 yuan/mt, and rebounded slightly near the close, ultimately settling at 16,630 yuan/mt, down 115 yuan/mt or 0.69%. Lead prices were under pressure and in the doldrums before the Labour Day holiday, with sluggish trading and weak demand. In the early post-holiday period, primary lead inventory buildup and warrant transfers will continue to weigh on prices. From mid-to-late May, as primary lead maintenance, sustained secondary lead production cuts, and sharp import declines take effect, supply contraction will gradually emerge, providing rebound momentum for lead prices. SMM expects lead prices to remain in the doldrums in the short term. Data source disclaimer: Data other than publicly available information is derived from publicly available information, market communication, and SMM's internal database models, processed by SMM for reference only and does not constitute decision-making advice.

The most-traded BC copper contract 2606 opened at 89,560 yuan/mt today. It maintained wild swings in early trading, then the copper price center gradually shifted upward to 89,990 yuan/mt after the daytime session opened, before fluctuating downward to a low of 89,150 yuan/mt, and finally closed at 89,460 yuan/mt, down 0.26%. Open interest stood at 9,089 lots, an increase of 166 lots from the previous trading day, with trading volume at 5,934 lots, indicating bears adding positions. The US Fed kept the current interest rate unchanged, with notable internal policy stance divergence. Powell will remain as a governor after stepping down as Fed Chairman, and Warsh's nomination has passed the Senate committee review. Trump stated that conditions were currently suitable for an interest rate cut, while making clear that sanctions on Iran would not be lifted until the Iranian nuclear issue is resolved. The US and Iran are currently maintaining phone communications. Iran released a tough signal, warning that if the US continued to seize vessels, it might take unprecedented military countermeasures, with related retaliation plans still advancing. Combined with rising international crude oil prices, the overall atmosphere exerted some pressure on copper prices. Fundamentals side, on the supply end, arrivals of imported copper pulled back, while domestic source arrivals remained stable. However, approaching the month-end settlement period, suppliers showed weak willingness to sell, and spot circulation remained tight. Demand side, end-user pre-holiday stockpiling was largely completed, overall procurement sentiment was sluggish, and spot trades were mediocre. Inventory side, as of Thursday April 30, SMM copper cathode social inventory in major regions nationwide decreased by 5,600 mt WoW to 243,000 mt; current total inventory was 113,400 mt higher compared to the same period last year at 129,600 mt. SHFE copper 2606 contract closed at 101,030 yuan/mt. Based on BC copper 2606 contract at 89,460 yuan/mt, its after-tax price was 101,089 yuan/mt, and the price spread between SHFE copper 2606 and BC copper was -59, with the spread returning to an inverted state.

[SMM Analysis] This week (April 27-April 30), Yangshan copper premiums B/L weekly average price range was 53.5-71.5 $/mt, QP June, average price $62.5/mt; warrant weekly average price range was 56-72.5 $/mt, QP May, average price $64.25/mt; EQ copper CIF B/L was 22.5-41 $/mt, QP June, average price $31.75/mt.

Next week, due to the Labour Day holiday, China's SHFE and other exchanges will be closed on May 4-5; the LME outside China will be closed on May 4 for the Early May Bank Holiday. Key macro economic data includes US April ADP employment, US April unemployment rate, and US April seasonally adjusted non-farm payrolls, which are about to be released. Additionally, according to the latest news, the first batch of US tariff refunds will be issued around May 11, indicating a loosening of tariff policies, while we need to continue monitoring the progress of US-Iran negotiations. LME lead side, LME lead inventory decline slowed down, while the LME Cash-3M spread maintained a slight discount for nearly a week, indicating strong support for lead prices. The impact of Middle East events on shipping has not yet been resolved, and spot supply in Southeast Asia remains tight, especially with high-grade lead ingot premiums at elevated levels. Lead prices are expected to continue consolidating and await new factors. LME lead is expected to trade in the range of $1,935-1,975/mt next week. SHFE lead side, downstream enterprises will be on concentrated holiday during Labour Day, while lead smelter maintenance or production shutdowns increased in April-May. However, the concentrated short-term consumption reduction still poses a significant risk of inventory buildup for lead ingots after the holiday. Combined with new delivery factors in May, lead prices may come under pressure and weaken before the holiday. The most-traded SHFE lead contract is expected to trade in the range of 16,450-16,800 yuan/mt next week. Spot price forecast: 16,350-16,650 yuan/mt. Supply side, primary lead and secondary lead smelters are undergoing concentrated maintenance, lead ingot supply is tightening regionally, and the import window for lead ingots has closed, reducing imported lead inflows. If lead prices weaken subsequently, spot discounts (against futures) in some regions will narrow, and secondary lead may even see an inversion (i.e., premiums against SMM #1 lead average price). After the holiday, downstream enterprises will resume production, but due to mediocre order performance, producers will maintain a produce-based-on-sales approach.