[Shanghai aluminum futures consolidated narrowly during the night session, with slow downstream resumption of work leading to volatile aluminum prices] On the fundamentals, seasonal pressure remains prominent. On the supply side, new aluminum projects in the domestic market are steadily ramping up production, while the proportion of liquid aluminum conversion remains temporarily low. On the demand side, post-holiday operating rates of downstream processing materials show a steady recovery pace. However, under the influence of seasonal supply exceeding demand and some cargo backlog at railway stations, it is expected that the peak inventory of aluminum ingots domestically after the holiday will exceed 1.35 million mt, hitting a new high in nearly five years, which will be an important factor suppressing price rises. Overall, in the short term, Shanghai aluminum futures will continue a volatile pattern.

SMM February 26 News: In the morning session, SHFE aluminum 2602 fluctuated downward, with the price center higher than the previous trading day. Influenced by the spot-futures price spread and the price spread between futures contracts, some traders entered the market to build positions, leading to a continuous rise in spot quotations since the opening. The mainstream quotations concentrated around the average to 30 yuan/mt. Today, the shipment sentiment index in the east China market was 2.81, up 0.15 MoM; the purchasing sentiment index was 2.7, up 0.08 MoM. SMM A00 aluminum closed at 235,200 yuan/mt, up 1,400 yuan/mt from the previous trading day, at a discount of 1,800 yuan/mt against the 2603 contract, an increase of 200 yuan/mt from the previous trading day. Today, SHFE aluminum prices rose, and traders holding stocks in the central China market showed a clear willingness to sell at high prices. However, during the initial period after the Chinese New Year holiday, downstream processing enterprises had not fully consumed their inventories, coupled with high aluminum prices, resulting in low restocking willingness. Overall, the market's trading situation was poor, with trading volume lower than the previous two days. Ultimately, the actual transaction price in the central China market fell from a premium of 10 yuan/mt over the central China price before the opening to a discount of 40 yuan/mt. Today, the shipment sentiment index in the central China market was 2.6, up 0.06 MoM; the purchasing sentiment index was 2.13, down 0.03 MoM. SMM central China closed at 234,100 yuan/mt, up 1,100 yuan/mt from the previous trading day, at a discount of 2,900 yuan/mt against the 2603 contract, a decrease of 100 yuan/mt from the previous trading day. The price difference between Henan and Shanghai was -1,100 yuan/mt, widening by 300 yuan/mt from the previous trading day. In terms of inventory, today, the aluminum ingot inventory in the main consumption areas increased by 26,000 mt MoM. Affected by the Chinese New Year break, all three regions showed an inventory buildup. In the short term, post-Chinese New Year, aluminum ingots continued to experience seasonal inventory buildup, and spot premiums/discounts are expected to remain under pressure.

[SMM Aluminum Morning Meeting Minutes: Expectations for US Fed Interest Rate Hike Heat Up, Aluminum Prices to Move Sideways in the Short Term] Overall, from a macro perspective, rising short-term expectations for US Fed interest rate hikes are pushing up the US dollar, while geopolitical tensions between the US and Iran and tariff policies are intensifying risk aversion. Coupled with a slowdown in US economic resilience and a weak recovery in the eurozone, the global macro environment is characterized by a fragile balance and high fluctuations. Seasonal pressure from the fundamentals is becoming more pronounced. On the supply side, new aluminum projects domestically and overseas are steadily ramping up production. Demand side, attention should be paid to the pace of downstream enterprise resumptions after the holiday. Currently, due to seasonal oversupply, the market widely expects post-holiday inventory peaks to reach 1.3 million mt, hitting a five-year high, which will be a key factor suppressing prices. Overall, aluminum prices are expected to move sideways in the short term.

SMM February 24: SHFE aluminum 2602 fluctuated upward in the morning session, with the price center rising from the previous trading day. Influenced by the higher SHFE aluminum prices, overall purchase sentiment still lagged behind shipment sentiment, but due to the end of the Chinese New Year break, transaction sentiment rose compared to the pre-holiday trading day. Mainstream quotations concentrated at a discount of 20 yuan/mt to the average price. Today, the shipment sentiment index in the east China market was 2.34, up 0.34 WoW; the purchase sentiment index was 2.31, up 0.25 WoW. SMM A00 aluminum closed at 23,390 yuan/mt, up 230 yuan/mt from the previous trading day, at a discount of 160 yuan/mt against the 2602 contract, down 40 yuan/mt from the previous trading day; at a discount of 210 yuan/mt against the 2603 contract. After the Chinese New Year break, traders and downstream enterprises in central China gradually resumed work. Aluminum ingot inventory saw a significant buildup, and post-holiday recovery boosted shipment and purchase willingness among traders and processing enterprises. However, as the holiday was not completely over, some traders adopted a wait-and-see approach, and market transactions remained sluggish. Actual transaction prices in the central China market finally ranged from a discount of 20 yuan to a premium of 20 yuan against the central China price, with premiums and discounts narrowing as aluminum prices rose. Today, the shipment sentiment index in the central China market was 2.52, up 0.27 WoW; the purchase sentiment index was 2.14, up 0.24 WoW. SMM central China closed at 23,310 yuan/mt, up 230 yuan/mt from the previous trading day, at a discount of 240 yuan/mt against the 2602 contract, down 40 yuan/mt from the previous trading day; at a discount of 290 yuan/mt against the 2603 contract. The price spread between Henan and Shanghai was -80 yuan/mt, flat from the previous trading day. Inventory side, aluminum ingot inventory in major consumption areas increased by 196,000 mt WoW, with all three regions showing inventory buildup due to downstream Chinese New Year breaks. In the short term, high aluminum prices may continue to suppress end-use demand, and combined with the impact of downstream holiday breaks, aluminum ingots still face inventory buildup risks, and spot premiums/discounts are expected to remain under pressure.

SMM February 24: In the morning session, SHFE aluminum 2602 fluctuated upward, with the price center rising compared to the previous trading day. Influenced by the rise in SHFE aluminum prices, overall purchase sentiment still lagged behind shipment sentiment, but overall, due to the end of the Chinese New Year break, transaction sentiment increased compared to the previous pre-holiday trading day. Mainstream quotations concentrated between -20 yuan/mt to the average price. Today, the East China market shipment sentiment index was 2.34, up 0.34 WoW; the purchase sentiment index was 2.31, up 0.25 WoW.

[SMM Aluminum Morning Meeting Minutes: Macro Tug-of-War Between Longs and Shorts, Aluminum Prices Fluctuate Considerably at High Levels] Overall, the current SHFE aluminum price has experienced a short-term sharp rise driven by events and capital, with market trading sentiment in a phase of excitement. Subsequently, caution is needed against the risk of sentiment cooling and market correction triggered by multiple factors.

According to SMM statistics, regarding the inventory of aluminum billets in two domestic locations, the inventory of aluminum billet in Guangdong was 56,800 mt, while the inventory in Wuxi was 19,800 mt, totaling 76,600 mt, a decrease of 1,400 mt MoM. SHFE aluminum prices surged consecutively, with A00 spot aluminum prices in east China gradually approaching the 21,000 yuan/mt threshold. In recent times, the aluminum billet market has seen sluggish transaction performance due to the suppression of high aluminum prices, and the de-stocking of aluminum billets has also shown a significant slowdown. Downstream sentiment is strongly influenced by fear of high prices, and market quotations are severely polarized. The overall center of processing fees for aluminum billets in three domestic locations has shifted significantly downward, with double-digit processing fee quotations appearing in Wuxi and Foshan, and even zero or negative processing fees in Nanchang, resulting in dismal transaction performance. As of June 18, 2025, the aluminum billet market in Foshan reported 50/100, down 100; the processing fees for aluminum billets in Wuxi were reported at 50/130, down 110; and the processing fees in Nanchang were reported at -50/0, down 80. (Unit: yuan/mt)

According to SMM statistics, regarding the inventory of aluminum billets in two domestic locations, the inventory of aluminum billet in Guangdong was 56,800 mt, while the inventory in Wuxi was 19,800 mt, totaling 76,600 mt, a decrease of 1,400 mt MoM. SHFE aluminum prices surged consecutively, with A00 spot aluminum prices in east China gradually approaching the 21,000 yuan/mt threshold. In recent times, the aluminum billet market has seen sluggish transaction performance due to the suppression of high aluminum prices, and the de-stocking of aluminum billets has also shown a significant slowdown. Downstream sentiment is strongly influenced by fear of high prices, and market quotations are severely polarized. The overall center of processing fees for aluminum billets in three domestic locations has shifted significantly downward, with double-digit processing fee quotations appearing in Wuxi and Foshan, and even zero or negative processing fees in Nanchang, resulting in dismal transaction performance. As of June 18, 2025, the aluminum billet market in Foshan reported 50/100, down 100; the processing fees for aluminum billets in Wuxi were reported at 50/130, down 110; and the processing fees in Nanchang were reported at -50/0, down 80. (Unit: yuan/mt)

[SMM Midday Review of Spot Aluminum: Inventory Continues to Decline, Price Spread Between Futures Contracts and Premium Rise in Tandem] This morning, the center of SHFE aluminum prices continued to break through upwards, piercing through the narrow fluctuation rangebound near 20,500 yuan/mt. Cargo availability in east China is tight, with the backwardation structure further expanding, and suppliers maintaining a high premium. 1: In-transit cargoes are expected to be limited; 2: The ultra-low inventory level in the spot market indicates that deliverable cargoes are expected to be scarce; 3: Major players are purchasing at high premiums in the market. The market is trading at a premium of 30-40 yuan/mt against the SMM average price. Today, SMM A00 aluminum is quoted at 20,650 yuan/mt, up 250 yuan/mt from the previous trading day, with a premium of 70 yuan/mt against the June contract and 220 yuan/mt against the July contract.

[SMM Morning Aluminum Meeting Summary: Macro Factors Favorable, Coupled with Destocking Support, Aluminum Price Center Moves Higher] Overall, on the macro side, the Sino-US consultation meeting is expected to ease the trade war, while the rebound in China's manufacturing PMI and improvement in export indicators in May provide demand support, indicating that the resilience of the domestic economy remains. Fundamentals. Currently, the low inventory and the expectation of a rising proportion of liquid aluminum provide strong support for aluminum prices. However, the pressure of the off-season on the demand side limits the upside room. Spot aluminum ingots in major consumption areas may soon face a situation of weak supply and demand, and aluminum prices are expected to remain volatile and range-bound in the short term.