[Middle East Geopolitical Risks Cool Down, Aluminum Prices Under Pressure in the Short Term] On the macro front, Trump announced the cancellation of the originally planned military strike against Iran, as negotiations mediated by relevant countries made progress, easing market concerns over an escalation of Middle East conflicts. High inventory levels in China remain the core factor suppressing significant price rallies. Additionally, weak trading performance in the spot market further limits the upside room for aluminum prices. In the short term, aluminum prices are expected to continue the pattern of LME outperforms SHFE, fluctuating at highs.

SMM May 18 News: According to unofficial information gathered by SMM from the market, a northern manufacturer recently concluded an open tender to the entire market for hundreds of metric tons of refined bismuth under its group. Although the final tender results were not publicly disclosed, the outcome appeared to be less than satisfactory. Under the arrangement that allowed non-one-time full pickup, no transactions were concluded. Some market participants also learned that the reason for the failed tender was that there were not enough enterprises participating in the bidding, which meant the conditions for bid opening were not met, and therefore the tender was canceled. Other market participants noted that since hundreds of metric tons of bismuth ingots represent a relatively large volume, and considering that current market demand is primarily driven by end-user spot orders from downstream buyers, large-volume speculative purchases are not the mainstream trading method in the current market. Therefore, the absence of any transaction in this tender is understandable and will not have a significant impact on the current market pricing landscape.

[Easing China-U.S. Trade Tensions Combined with Ex-China Supply Gap — LME Outperforms SHFE in Aluminum Prices] The macro front received positive signals as China-U.S. trade negotiations yielded preliminary results. Both sides agreed to continue implementing prior tariff arrangements and to establish a Trade and Investment Council, which is expected to facilitate tariff reductions on certain products. The marginal easing of trade frictions is set to improve export expectations for aluminum semis and end-use products, providing bullish support for market sentiment. However, inventory at high levels in China remains the core factor suppressing significant price rallies. Coupled with weak spot market trading performance, this further limits the upside room for aluminum prices. In the short term, aluminum prices are expected to continue the pattern of LME outperforming SHFE, fluctuating at highs.

Trump's May 13-15, 2026 state visit starkly contrasts with his Nov 2017 trip, where $250B in deals epitomized globalization. Months later, in March 2018, a trade war erupted.

[Macro Tailwinds and Inventory Pressure Coexist, Limiting Upside Room for Aluminum Prices] Current macro tailwinds are being released in a concentrated manner, the global rigid supply gap for aluminum has been confirmed, and China’s aluminum ingot inventory has entered initial destocking. Multiple positive factors are providing support for aluminum prices. However, inventory at high levels in China remains the core factor suppressing a sharp price surge. In addition, spot market trading has been relatively weak, and expectations for US Fed interest rate hikes this year have been heating up, further limiting upside room for aluminum prices. Going forward, attention should be paid to whether China’s aluminum ingot inventory can maintain sustained destocking, thereby easing the pressure that inventory at high levels exerts on aluminum prices.

[SMM Cast Aluminum Alloy Morning Comment: Dual Pressure from Policy and Demand, Secondary Aluminum Weekly Operating Rate Pulls Back] ADC12 prices are expected to move sideways in the short term. On the cost side, high-level support, combined with the tightening of reverse invoicing and expectations for production cuts at some enterprises, limits the downside room for prices; however, demand is unlikely to see significant improvement in the short term, and inventory remains in an accumulation cycle, which will continue to suppress upside room for prices. Going forward, key attention should be paid to the recovery of end-use consumption and the further impact of policies on the scale of production cuts on the supply side.

[SMM Analysis]Policy Intensified Supply Contraction Supporting ADC12 Price Rebound, but Weak Demand Capped Upside Potential

[SMM Silicone Weekly Review: Silicone Overall Product Price Center Shifted Slightly Upward, Weekly Market Trading Atmosphere Was Subdued] This week, the transaction center of China's silicone DMC market shifted slightly upward, with the mainstream transaction range at 14,800-15,000 yuan/mt, up 50 yuan/mt WoW. Regional quotations: monomer enterprises in Shandong quoted 14,800 yuan/mt, up 100 yuan/mt WoW; monomer enterprises in north-west China lowered their online store prices by 800 yuan/mt to 15,100 yuan/mt; mainstream quotations in other regions were mainly at 15,000-15,200 yuan/mt. Currently, mid- and downstream enterprises were primarily drawing down inventory, so overall market transactions this week were limited to small volumes of just-in-time procurement.

This week, ternary cathode material prices continued their upward trend. Raw material side, nickel sulphate, cobalt sulphate, and manganese sulphate prices were basically flat this week. Mainly driven by spot lithium carbonate and lithium hydroxide prices still rising sharply, ternary cathode material prices reached a periodic high. Transaction side, spot lithium carbonate and lithium hydroxide prices saw a slight correction in the latter half of the week, providing some producers with pricing opportunities and resulting in small-batch order transactions. Long-term contract side, discounts showed no significant change recently. Demand side, China's EV market was in a phase of concentrated stockpiling for new car models, with orders recovering notably; markets outside China also saw strong demand, driven by impressive European auto sales and stockpiling for new product launches by certain brands, jointly boosting order growth at cathode plants in China. Consumer market side, demand remained mediocre recently due to the traditional off-season and continuously rising raw material prices.

[Tungsten News Flash] SMM May 14: The tungsten concentrates market showed a sharp downward trend. The spot order negotiation center in the industry continued to shift lower. With intensive maintenance in the downstream APT sector and weakening market demand, suppliers were highly motivated to make shipments, and most spot order negotiations in the market were conducted at significant discounts from the online prices. Major mines in regions such as Jiangxi and Hunan mainly made shipments under long-term contracts. The price spread between long-term contract prices and current market spot order prices widened to over 300,000 yuan/standard tonne (65%WO3 basis). Based on current spot order transaction information and the proportion of long-term contracts, SMM 65% wolframite concentrates closed at 550,500 yuan/standard tonne (65%WO3 basis) today, down 50,000 yuan/standard tonne (65%WO3 basis) from the previous day.