Futures: SHFE aluminium closed at RMB 24,545 per tonne last night, down 0.43 per cent. The price was slightly below MA5 (24,643) but near MA10 (24,433.5), MA30 (24,505.67), and MA60 (24,344.17), under short-term pressure but still supported by medium-term moving averages. The MACD indicator DIF (76.15) and DEA (52.88) maintained a golden cross above the zero axis, but the histogram narrowed to 46.55, indicating weakening bullish momentum. The suggested core trading range for SHFE aluminium is 24,400-25,000.

 LME aluminium closed at USD 3,506 per tonne, up 1.02 per cent. The price was running above all moving averages, with MA5 (3,481), MA10 (3,387.65), etc., in a standard bullish alignment, maintaining a solid upward trend. The MACD indicator DIF (62.45) and DEA (48.52) showed a golden cross pointing upward, with a positive histogram (27.85), indicating sustained upward momentum. The suggested core trading range for LME aluminium is 3,480-3,550.

Macro front: On April 7 local time, US President Trump posted on social media: "I have agreed to a pause on the bombing and strikes on Iran for a period of two weeks." Subsequently, a White House official stated that Israel had agreed to a temporary ceasefire. On the other hand, Iran's Supreme National Security Council issued a statement saying that, based on the Supreme Leader's recommendation and the approval of the Supreme National Security Council, it accepted the ceasefire proposal put forward by Pakistan.

Fundamentals: Supply side, the Middle East conflict impacted core capacity, and the proportion of liquid aluminium in China rebounded significantly. Ex-China supply was directly hit by geopolitical conflicts, with Middle Eastern aluminium enterprises cutting production. Recently, the UAE's EGA and Bahrain's Alba were successively struck by missile attacks, with production facilities damaged. The extent of damage is still under comprehensive assessment. The market widely expects large-scale production cuts or even shutdowns, with the global aluminium supply gap expected to widen and concerns over ex-China supply continuing to escalate. 

In China, the proportion of liquid aluminium rose in March as downstream enterprises fully resumed work after the holiday, up 9.3 percentage points M-o-M to 73.7 per cent, higher than early-month expectations. Entering the traditional peak consumption season in April, downstream operating rates continued to rise, and the proportion of liquid aluminium is expected to climb further. On the inventory side, high aluminium prices in China suppressed downstream willingness to actively restock, with downstream enterprises generally purchasing as needed based on orders and maintaining low inventory operations, with no large-scale stockpiling behaviour for now. On Tuesday, China's aluminium ingot social inventory saw an inventory buildup of 24,000 tonnes compared to pre-holiday levels, with short-term inventory still at a relatively ample level. Inventories outside China continued to decline, with LME aluminium inventory maintaining a downward trend this week, having fallen to 414,000 tonnes.

Primary aluminium market: SHFE aluminium 2604 fluctuated upward in the morning session, with the centre of gravity running lower than the previous day. Affected by the approaching delivery date, some traders purchased cargoes to earn the price spread between futures contracts, and coupled with limited shipments from aluminium smelters, market transactions gradually moved higher. Market transactions were mainly concentrated around the SMM A00 aluminium discount average price to a premium of RMB 20 per tonne. 

Yesterday, the East China market shipment sentiment index was 3.31, down 0.03 M-o-M; the purchasing sentiment index was 3.64, up 0.09 M-o-M. Before the opening, central China market traders' quotes continued the trend from the previous trading day, but prices edged slightly lower afterwards. Excessive market inventory limited price increases, and with aluminium prices at elevated levels, the lack of peak-season characteristics in end-user orders constrained downstream manufacturers' buying sentiment, and overall market trading atmosphere was rather sluggish. 

Ultimately, actual transaction prices in the central China market ranged from parity to a premium of RMB 30  over the central China price. Yesterday, the central China market shipment sentiment index was 2.7, flat M-o-M; the purchasing sentiment index was 2.46, down 0.03 M-o-M.

Aluminium scrap: Yesterday, spot primary aluminium fell RMB 30 per tonne from the previous trading day, while the aluminium scrap market saw mixed changes. Currently, the tightening regulatory stance on the "reverse invoicing" policy remains unchanged, compliance costs in the aluminium scrap recycling process stayed elevated, and actually available invoiced cargoes remained tight. Demand side, the traditional "Golden March, Silver April" peak consumption season underperformed expectations, and downstream scrap utilization enterprises such as secondary alloy producers mostly maintained just-in-time procurement with low inventory operations; high prices combined with wild swings in aluminium prices continued to suppress the purchasing enthusiasm of scrap utilization enterprises, overall market transactions were sluggish, and the "underperform in peak season" pattern persisted. Regarding the price difference between A00 aluminium and aluminium scrap, the price difference between A00 aluminium and mixed aluminium extrusion scrap free of paint in Foshan was recorded at RMB 3,115 per tonne, and the price difference between A00 aluminium and shredded aluminium tensile scrap in Foshan was RMB 1,825 per tonne. 

The aluminium scrap market is expected to hover at highs and fluctuate upward this week, with shredded aluminium tense scrap (priced based on aluminium content) mainstream range operating around RMB 20,800–21,300 per tonne (tax-exclusive). Supply side, regulatory policies such as "reverse invoicing" are unlikely to see substantive easing in the short term, and tight compliant supply combined with continued hold-back-from-selling sentiment at cargo yards will continue to provide price floor support. Demand side, the peak season recovery fell short of expectations, end-user order recovery lacked momentum, and the pattern dominated by just-in-time procurement is expected to persist. In the short term, close attention should be paid to the actual impact of Middle East geopolitical conflicts on global aluminium smelter capacity, downstream end-user order conditions, and the progress of reverse invoicing policy implementation, with vigilance against the risk of wild swings in aluminium prices at elevated levels.

Secondary aluminium alloy: Futures side, yesterday aluminium alloy prices surged rapidly after the morning opening, hitting an intraday high of RMB 23,740 per tonne with gains once exceeding 0.7 per cent. Subsequently, bullish momentum waned, prices fluctuated and pulled back, and continued to probe lower approaching the midday session, reaching a low of RMB 23,470 per tonne. As of midday, the contract was quoted at RMB 23,505 per tonne, down RMB 65 per tonne from the previous trading day's settlement price, a decline of 0.28 per cent. 

Technical side, the 4-hour KDJ indicator turned downward, with obvious short-term pressure; the intraday KDJ pulled back from highs, indicating insufficient intraday rebound momentum. Market sentiment leaned cautious, with the overall pattern showing a volatile structure of pressure and pullback after an attempted rally. Spot side, the ADC12 market continued in the doldrums yesterday. Affected by aluminium prices being in the doldrums and lacklustre demand-side performance, market sentiment turned cautious. Most market participants slightly lowered their quotes, while a few enterprises held prices steady and adopted a wait-and-see approach. Low-priced resources increased yesterday, the transaction centre shifted downward, and prices showed characteristics of a passive pullback. In the short term, against the backdrop of weakening marginal cost support and limited demand improvement, ADC12 prices are expected to remain in the doldrums.

Aluminium market summary: Macro front, the US and Iran reached a two-week temporary ceasefire agreement, and market risk sentiment recovered somewhat. However, the Strait of Hormuz has not simultaneously reopened, and the potential threat of shipping disruptions persists, making it difficult for the geopolitical premium to be fully unwound. Supply side, the substantial damage previously caused is irreversible. Aluminium capacity in the Middle East suffered direct military strikes, with UAE's EGA and Bahrain's Alba successively attacked and production facilities damaged. 

The global aluminium supply gap expectations expanded significantly, and concerns over ex-China supply continued to escalate. Meanwhile, China entered the traditional peak consumption season, with the proportion of liquid aluminium rebounding sharply to 73.7 per cent, downstream operating rates rising steadily, and demand-side support remaining solid. Overall, the two-week ceasefire news cannot reverse the firm pattern supported by substantial supply damage and low inventory. The expectations of substantial supply contraction triggered by attacks on Middle Eastern aluminium smelters, combined with globally low inventory and China's peak-season demand recovery, will provide strong upward momentum for aluminium prices, with aluminium prices holding up well in the short term.

Note: This article has been issued by SMM and has been published by AL Circle with its original information without any modifications or edits to the core subject/data.