[SMM Weekly Survey of the Aluminum Downstream Sector: Downstream Aluminum Operating Rate Continued to Rebound to 61.9%, with High Prices Suppressing the Peak "Golden March" Season] This week, the weekly operating rate of leading downstream aluminum processing enterprises in China rose 2.4 percentage points MoM to 61.9%, overall extending the post-holiday recovery trend, with all segments rebounding MoM, and the industry as a whole entering a normal production pace.

[[Weekly Review of Aluminum Scrap and Secondary Aluminum]]Aluminum Prices Strengthened This Week, Rising Costs Drove Up ADC12 Prices

[SMM Aluminum Price Weekly Review: Geopolitical Disruptions Dominate, Aluminum Prices Remain Elevated]

SMM, March 12: The SHFE aluminum 03 contract opened today and fluctuated upward. High aluminum prices suppressed downstream demand, overall procurement demand remained weak, and market premiums continued to soften. Market premiums kept declining from the opening. Today’s mainstream transaction prices were concentrated at discounts of 20 yuan/mt to the average price. Today, the east China market’s shipments sentiment index was 3.32, up 0.05 MoM; the purchasing sentiment index was 2.57, down 0.09 MoM. With aluminum prices rising for consecutive days, traders and downstream processing enterprises in the central China market showed weak buying sentiment, while end-user clients were also less willing to pick up goods. Downstream plants faced inventory overhang, with costs and operating rates constrained, maintaining only limited restocking for rigid demand or suspending restocking altogether. Meanwhile, suppliers showed a strong willingness to sell but weak willingness to hold prices firm. Ultimately, actual mainstream transaction prices in the central China market were mostly around discounts of 10-20 yuan to the central China price. Today, the central China market’s shipments sentiment index was 2.67, up 0.02 MoM; the purchasing sentiment index was 2.32, down 0.02 MoM. Inventory side, aluminum ingot inventory in major consumption regions increased by 7,500 mt MoM today, with the inventory buildup mainly coming from Guangdong and Gongyi. In the short term, aluminum ingot continued its post-Chinese New Year seasonal inventory buildup, and affected by bullish sentiment, premiums are expected to remain on a narrowing trend.

[SMM Aluminum Morning Briefing: Middle East Situation Remains Deadlocked, Aluminum Prices Hold Up Well] Overall, macro geopolitical risks are providing support at the bottom of prices, while the continued buildup in China’s social inventory is weighing on aluminum prices. However, the geopolitical situation in the Middle East remains unclear. If the conflict persists, expectations for tighter global aluminum supply will remain strong, and aluminum prices will still have solid upward momentum. In the short term, aluminum prices are still expected to hold up well.

[Spot Silicon Metal Prices Probe Higher as Market Transactions Remain Stagnant; Polysilicon Price Trend Declines]: On the supply side, production release from silicon metal capacity that resumed production in early March increased total silicon metal supply compared with early March. Recently, there have been scattered production resumptions in Southwest China, but these have not yet become widespread, so their impact on supply growth has been very limited. On the cost side, spot prices of silicon coal and electrodes have remained temporarily stable recently, while petroleum coke prices rose slightly. Coupled with higher gasoline prices, road transport freight rates were raised slightly, providing relatively strong cost support for silicon metal. On the demand side, performance has mainly remained stable recently. During the week, spot silicon metal transactions were stagnant, inventory in the intermediate segment stayed at a high level, and downstream demand was weak, so silicon metal prices had limited room to rise or fall and were mainly range-bound in consolidation.

[SMM Cast Aluminum Alloy Morning Comment: Futures Rebound Lifted Sentiment, Spot Quotes Rose Across the Board] Spot market, boosted by the rebound in futures prices, ADC12 quotes rose across the board today, with the SMM average price of ADC12 raised by 300 yuan/mt. Driven by the cost side, producers actively recouped earlier losses, generally raising prices by 200-400 yuan/mt. However, affected by wild swings in prices during the week, downstream purchase sentiment remained cautious, with most buyers staying on the sidelines and only restocking to meet immediate needs, while the overall pace of market transactions was stable. In the short term, against the backdrop of cost support and a mild release of supply, ADC12 prices were expected to hold up well.

SMM, March 11: SHFE aluminum 2603 strengthened in early trading, with the price center rising sharply from the previous trading day. Market sentiment for shipments increased, and buying sentiment also improved, but high aluminum prices suppressed downstream demand, leaving overall procurement demand still weak. Market premiums continued to decline from the opening. Today’s mainstream transaction prices were concentrated at discounts of 20 yuan/mt to the average price. Today, the east China market shipment sentiment index was 3.27, up 0.08 MoM; the buying sentiment index was 2.66, up 0.13 MoM. Recently, the SHFE aluminum front-month contract fluctuated widely and rose sharply today. Buying sentiment among downstream processing enterprises in central China weakened, but traders’ bullish purchase sentiment provided slight support. Overall market trading volume declined from the previous two days, with a wait-and-see mood still dominating. In the end, the actual transaction price range in the central China market was around parity with the central China price to a discount of 20 yuan against the central China price. Today, the central China market shipment sentiment index was 2.64, up 0.06 MoM; the buying sentiment index was 2.34, down 0.08 MoM. Inventory side, aluminum ingot inventory in major consumption regions increased by 2,500 mt MoM today, with Guangdong as the main source of the inventory buildup. In the short term, after the Chinese New Year, aluminum ingot continued its seasonal inventory buildup. Affected by bullish market sentiment, premiums are expected to remain on a narrowing trend.

[SMM Aluminum Morning Briefing: The Geopolitical Situation in the Middle East Remains Unclear, and Aluminum Prices Still Have Upward Momentum in the Short Term] Overall, macro geopolitical risks are providing support at the bottom. Although the continued buildup in domestic social inventory is exerting bearish pressure on aluminum prices, the geopolitical situation in the Middle East remains unclear. If the conflict continues, expectations for global aluminum supply to tighten are strong, and aluminum prices still have solid upward momentum. In the short term, aluminum prices are expected to hold up well.

[SMM Cast Aluminum Alloy Morning Comment: SHFE Aluminum Has Seen Wide Swings for Many Days, While Alloys Rose Strongly in Tandem] Yesterday, the SMM ADC12 price increased by 500 yuan/mt, with the center of market quotations shifting up significantly. Most producers raised prices by 500–600 yuan/mt. Recently, raw material prices have continued to strengthen, and the cost side has risen rapidly, providing a clear boost to enterprise quotations. However, downstream demand remained relatively stable. Most enterprises reported that orders and inquiries were generally average, while downstream procurement still mainly focused on restocking as needed. Supported by cost pressure and market expectations, enterprises showed a relatively clear willingness to raise prices. In the short term, against the backdrop of cost support and mild supply release, ADC12 prices are expected to hold up well. The medium-term trend still depends on the recovery of end-use consumption. If orders in the die-casting industry increase significantly, the price center is expected to move further upward; if the demand recovery falls short of expectations, coupled with a continued increase in the supply-side operating rate, prices will shift into high-level consolidation.