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.

This week, ferrous metals moved sideways and upward. During the week, as US-Iran negotiations made no progress and the Strait of Hormuz remained closed, combined with declining US crude oil inventories, Brent crude oil surged sharply, driving coking coal higher. Although BHP port spot cargoes were available for purchase, which was bearish for market sentiment, futures had already priced in related expectations earlier, so iron ore pullback was limited and cost support was relatively neutral. The Politburo meeting held mid-week had low direct correlation with ferrous metals, and ferrous metals fluctuated at highs during the week. Spot market side, end-users restocked at low prices before the holiday, and as futures rose in the latter half of the week, speculative demand was also released...

SMM April 30 update: This week, mainstream transaction prices of domestic ordinary secondary crude lead (tax-exclusive) were 15,250-15,350 yuan/mt, with overall subdued downstream procurement. Previously contracted imported crude lead arrived at ports, supplementing the spot market. The current lead import window is closed, with very few new orders signed. Looking ahead to next week, secondary lead supply in China is expected to remain generally stable, and the inflow of ex-China sources is expected to further pull back.

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.

April 30 update: Northern ports: South African high-grade iron ore at 33.1-35 yuan/mtu, flat WoW from last Friday; South African semi-carbonate at 39.8-40.3 yuan/mtu, down WoW from last Friday; Gabon at 44-44.6 yuan/mtu, down WoW from last Friday; 46% Australian lumps at 45.5-46 yuan/mtu, down WoW from last Friday. South China ports: South African high-grade iron ore at 36-36.5 yuan/mtu, flat WoW from last Friday; South African semi-carbonate at 37.8-38.5 yuan/mtu, down WoW from last Friday; Gabon at 42.5-43 yuan/mtu, down WoW from last Friday; 46% Australian lumps at 45-45.5 yuan/mtu, down WoW from last Friday.

[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.

Nickel prices continued to rise sharply this week, with the market narrative shifting from last week's "fluctuating at highs after policy materialization" to "full fermentation of substantive supply-side shocks." Indonesia's Weda Bay nickel mine announced a May production halt for maintenance due to exhausted RKAB quotas, Huayou Cobalt's subsidiary Huafei Nickel & Cobalt announced partial production line shutdowns from May 1 due to sulfur shortages, and the continued blockade of the Strait of Hormuz in the Middle East deepened the sulfur supply crisis. The three supply-side shocks combined to push nickel price centers sharply higher. The most-traded SHFE nickel contract broke through the 150,000 yuan/mt mark this week, while LME nickel briefly surpassed $19,500/mt intraday. Spot market, SMM #1 refined nickel averaged 150,000 yuan/mt this week, up 5,000 yuan/mt WoW. Spot premiums remained low as futures surged rapidly, with Jinchuan nickel premiums declining to 1,300 yuan/mt. Domestic mainstream electrodeposited nickel maintained significant discounts, further highlighting the structural feature of "strong futures, weak spot" in supply-demand fundamentals. On the macro front, US-Iran negotiations reached a complete impasse this week, with expectations of prolonged geopolitical risks rising. The two sides diverged sharply on the Strait of Hormuz issue: Trump claimed Iran was "on the verge of collapse and requesting the strait be opened," demanding Iran hand over all enriched uranium; Iran emphasized its "absolute control" over the strait and demanded transit fees from passing vessels. Fed Chairman nominee Warsh explicitly refused to commit to interest rate cuts at last week's hearing, and the market continued to digest this stance this week — CME Fed Watch showed a 99% probability of rates remaining unchanged in April and only about 3% probability of a cumulative 25bp cut by June, with monetary easing expectations virtually disappearing. Inventory, Shanghai Bonded Zone inventory was approximately 1,700 mt this week, flat WoW. China's social inventory was approximately 101,000 mt, with an inventory buildup of approximately 3,200 mt WoW. Looking ahead, although persistently high domestic inventory continued to pressure prices, Indonesia's Q2 triple shock of "ore tightening + sulfur supply disruption + MHP production cuts" is accelerating from expectations toward reality. After the Labour Day holiday, the most-traded SHFE nickel contract is expected to trade in the range of 145,000-155,000 yuan/mt.

This week, prices of 304 stainless steel scrap off-cuts in east China rose, with a quotation range of 10,550-10,650 yuan/mt. In Foshan, the same-specification stainless steel scrap off-cuts also strengthened, with a price range of 10,050-10,450 yuan/mt. From a raw material cost perspective, the current cost of producing stainless steel entirely from stainless steel scrap was approximately 14,761.4 yuan/mt, while the cost using entirely high-grade NPI reached 15,134.31 yuan/mt. Stainless steel scrap prices further strengthened this week. SS futures surged significantly, driven by SHFE nickel's rally amid geopolitical conflicts, which in turn transmitted to the spot market and pushed stainless steel spot prices higher in tandem. The alternative raw material high-grade NPI also rose in sympathy, bullish sentiment continued to build, and stainless steel scrap prices followed suit, maintaining a strong trend. The recent rapid rise in high-grade NPI prices further widened the cost advantage of stainless steel scrap over high-grade NPI. This core competitive edge continued to drive steel mills' preference for stainless steel scrap even amid persistent tax invoice issues plaguing the industry. Meanwhile, smelting margins at stainless steel mills gradually recovered, production enthusiasm remained high, production schedules stayed high, and procurement demand for stainless steel scrap remained solid, providing firm support for price rises. Overall, the stainless steel scrap market this week exhibited a further strengthening pattern characterized by "futures leading, raw material linkage, and demand support." Various supportive factors jointly dominated market trends, and although tax invoice issues persisted, they did not significantly constrain the strong price momentum. Stainless steel scrap prices were expected to hold up well in the near term.