[SMM aluminum flash] Current import ADC12 prices have pulled back to $3,230–$3,300/mt, and the domestic-ex-China inversion gap has narrowed to around 2,300 yuan/mt, the lowest level since mid-March. As prices outside China soften, import losses have recovered markedly from the earlier period. However, constrained by the still-large inversion, the import window remains closed. The willingness to bring in overseas resources is limited, and in the short term, their incremental supplement to domestic supply remains weak.

[Macro Headwinds Dominate Futures; SHFE and LME Aluminum Both Remain in the Doldrums] The US Fed’s hawkish pivot boosted the US dollar index, weighing on nonferrous metal prices. The Middle East geopolitical situation showed some volatility but no signs of deterioration. Under macro headwinds, aluminum prices in and outside China fell. In the short term, bearish factors dominate, and aluminum prices are expected to remain in the doldrums. Continued attention should be paid to production resumptions in the Middle East, overseas aluminum ingot inventory trends, and macro news fluctuations.

[SMM Cast Aluminum Alloy Morning Comment: Aluminum Alloy Night Session Decline Slows Down, Continuous Destocking and Firm Aluminum Scrap Keep Market Cautiously Wait-and-See] On Thursday, mainstream enterprises' quotes for ADC12 were generally lowered by 100–200 yuan/mt, and the SMM ADC12 price fell by 150 yuan/mt from the previous day to 23,850 yuan/mt. Amid the continuous price decline, downstream clients' purchasing enthusiasm did not significantly improve, with just-in-time procurement remaining dominant, wait-and-see sentiment relatively strong, and restocking willingness insufficient.

[SMM Cast Aluminum Alloy Morning Comment: Bears Add Positions, Aluminum Alloy Night Session Plunges, UAE Aluminum Scrap Export Ban Takes Effect] Overnight, aluminum alloy futures weakened sharply. The night session opened at 22,850 yuan/mt, closed at 22,720 yuan/mt, down 390 yuan/mt, or 1.69%.

[SMM Cast Aluminum Alloy Morning Comment: Aluminum Alloy Inventory Declines for Three Consecutive Weeks, Supply Tightening Deepens] Last Friday, the ADC12 market as a whole maintained its stable price operation pattern, with SMM ADC12 holding steady at 24,100 yuan/mt. Short-term ADC12 prices are expected to hover at highs.

[SMM Cast Aluminum Alloy Morning Comment: May Auto Market Domestic Demand Under Pressure, Exports Strong; Narrowing Price Difference Between A00 Aluminum and Scrap Tightens Raw Material Supply] The ADC12 market traded steadily on Wednesday, with the SMM ADC12 price remaining flat at 23,900 yuan/mt. This week, cast aluminum alloy futures diverged from SHFE aluminum, with cast aluminum futures steady to firm while SHFE aluminum fell below the 24,000 yuan/mt mark. In the spot market, A00 aluminum prices declined for consecutive sessions, but ADC12 prices remained firm. The spread between the two has returned to positive territory, ending the inversion since April, underscoring the resilience of alloy prices.

SMM Morning Meeting Summary: Last Friday night, LME copper opened at $13,788/mt, touched a high of $13,803/mt at the beginning of the session, then the copper price center continuously moved downward, dipping to $13,499.5/mt near the end of the session, and finally settled at $13,517/mt, a decline of 2.78%. Trading volume reached 25,200 lots, and open interest was 273,000 lots, increasing by 1,576 lots compared to the previous trading day, indicating an increase in bearish positions. Last Friday night, the most-traded LME copper contract 2607 opened at 104,790 yuan/mt, rose to 105,000 yuan/mt at the start, then fluctuated downward throughout the session, dipping to 103,600 yuan/mt near the end, and finally settled at 103,800 yuan/mt, a decline of 1.84%. Trading volume reached 62,000 lots, and open interest was 167,000 lots, decreasing by 6,309 lots compared to the previous trading day, indicating a reduction in bullish positions.

The most-traded BAI copper 2607 contract opened at 94,280 yuan/mt today, quickly peaking at 94,880 yuan/mt before swinging wildly. After the day session opened, copper prices’ center plunged straight down and then fluctuated downward, hitting an intraday low of 93,090 yuan/mt near the close, eventually settling at 93,380 yuan/mt, a drop of 0.61%. Open interest fell to 11,035 lots, down 152 lots from the previous trading day, while trading volume came to 8,286 lots, signaling long liquidation. On the macro front, Broadcom’s AI guidance fell short of expectations, cooling trading sentiment in the AI sector and weighing on AI-linked copper prices. A wait-and-see sentiment intensified as the market awaited tonight’s non-farm payrolls data — the first such report since Warsh took office. The market focused on the release of tonight's non-farm payrolls data, the first such release since Warsh took office. On the fundamental side, supply tightness persisted for high-quality spot copper, with few low-priced circulating sources. Combined with steadily widening import losses, contracted inflows from overseas arrivals limited domestic supply growth. On the demand side, downstream just-in-time procurement willingness recovered as copper prices pulled back, and spot purchasing saw some pick-up. The most-traded SHFE copper 2607 contract settled at 105,150 yuan/mt. Given that the most-traded BAI copper 2607 contract settled at 93,380 yuan/mt, its after-tax price was 105,519 yuan/mt, resulting in a price spread of -369 between the SHFE copper 2607 contract and the BAI copper contract. The spread remained inverted and widened from the previous day.

[SMM Shanghai Spot Copper] From a supply-demand perspective, consumption showed improvement compared to earlier. According to SMM, some suppliers reported an increase in downstream enterprise orders. Approaching delivery, the spread between the nearby SHFE copper contracts narrowed slightly. Buoyed by delivery-related support, suppliers’ willingness to hold prices firm rose somewhat, and Shanghai spot copper premiums edged up. In addition, import losses continued to widen, weakening the impetus for overseas cargo inflows, and supply-side increments were limited. Overall, supported by delivery dynamics, Shanghai spot copper quotes against the SHFE 2606 contract are expected to remain at a discount next week, with the discount possibly narrowing slightly.

As of May 26, the Shanghai-LME zinc price ratio stood at 6.97, continuing its downward trend from 7.4 recorded in late March, which has led to a widening import loss of refined zinc ingots in China. According to calculations by Shanghai Metals Market (SMM), the current import loss of China’s refined zinc ingots has expanded to approximately RMB 3,800 per metric ton of metal.