Futures: In the night session on April 1, the SHFE aluminium 2605 contract opened at RMB 24,830 per tonne, hit an intraday high of RMB 24,980 per tonne and a low of RMB 24,775 per tonne, and finally closed at RMB 24,910 per tonne, up RMB 250 per tonne from the previous close, or 1.01per cent. Technical analysis showed that the short-term moving averages (SMA5: 24,788.63; SMA10: 24,583.32) maintained an upward trend, with prices holding firmly above the 5-day and 10-day moving averages, further reinforcing the short-term bullish trend. The price spread between the medium-term moving averages (SMA20: 24,429.42; SMA40: 24,400.58; SMA60: 24,346.78) and the short-term moving averages continued to widen, while the medium-term cost centre remained highly concentrated. The MACD red bars persisted (DIFF: 90.70, DEA: -40.52, STICK: 262.44), with DIFF and DEA remaining in a golden cross, indicating continued strengthening in bullish m-o-mentum and ample upside m-o-mentum. In terms of open interest, night session open interest was about 248,000 lots, an increase of 1,479 lots from the previous session. 

On April 1, LME aluminium opened at USD 3,459.0 per tonne, hit an intraday high of USD 3,537.0 per tonne and a low of USD 3,425.0 per tonne, and finally closed at USD 3,527.5 per tonne, up 2.66per cent from the previous day. Open interest in the night session stood at about 683,000 lots, down 4,742 lots from the previous session.

Macro front: According to Xinhua News Agency, Li Qiang, a member of the Standing Committee of the Political Bureau of the CPC Central Committee and Premier of the State Council, conducted a survey in Sichuan from March 30 to April 1. 

He stressed the need to thoroughly implement General Secretary Xi Jinping's important statements on green development and building China into an energy powerhouse, carry out the new energy security strategy, adhere to innovation-driven development, leverage resource endowment advantages, continue expanding green electricity supply, focus on advancing new-type power grid construction, and accelerate the adjustment and optimization of the energy structure to provide strong support for high-quality economic and social development. (Bullish ★) Data released by ADP Research Institute on Wednesday showed that US private-sector employment increased by 62,000 in March, above the median analyst forecast of 40,000 in a Bloomberg survey. The previous month's increase was 63,000, broadly in line with this month. (Bearish ★)

Fundamentals: According to SMM data, the average tax-inclusive full cost of China's aluminium industry in March 2026 rose 0.5per cent m-o-m and fell 5.7per cent Y-o-Y, mainly due to a slight rebound in alumina raw material costs during the period. Aluminium capacity outside China that has already undergone production cuts (including Mozambique), together with capacity facing significant production reduction risk, exceeded 3 million tonnes. If production cuts at this portion of capacity are confirmed later, aluminium supply outside China is expected to maintain negative Y-o-Y growth for an extended period, and the global aluminium market is expected to face a sizable deficit, with the deficit outside China far exceeding that in China. On the inventory side, as of Thursday this week, aluminium ingot inventory in China’s major consumption hubs continued to build up, up 14,000 tonnes from Monday and up 38,000 tonnes from last Thursday.

Primary aluminium market: In the morning session, SHFE aluminium 2604 fluctuated downward, with its centre largely flat from the previous day. Affected by elevated aluminium prices, downstream procurement enthusiasm was low, with purchases mainly made against orders and little inventory buildup. Market shipment sentiment was relatively strong, and available cargoes were fairly ample, pushing spot transaction premiums wider. Market transactions were mainly concentrated at discounts of RMB 10 per tonne to the SMM A00 aluminium average price. Yesterday, the shipment sentiment index in east China was 3.41, up 0.1 m-o-m; the purchasing sentiment index was 3, down 0.11 m-o-m. With the arrival of the first trading day of April, downstream processing enterprises in central China entered a new order cycle, and buying sentiment improved markedly from the previous day, driving traders’ purchase volumes higher as well. Market trading turned more active, and overall trading volume rose sharply. As trading volume increased, market transaction prices were gradually raised, with actual transaction prices in the central China market ultimately around parity to a discount of 40 yuan against the central China price. Yesterday, the shipment sentiment index in the central China market was 2.76, up 0.02 m-o-m; the purchasing sentiment index was 2.42, up 0.1 m-o-m.

Secondary aluminium raw material: The US-Iran war disrupted fund sentiment and aluminium fundamentals. Yesterday, primary aluminium spot prices dropped slightly by RMB 10 per tonne from the previous trading day, while the aluminium scrap market was largely stable overall. Amid wild swings in aluminium prices yesterday, aluminium scrap yards showed a stronger willingness to hold back cargoes, highlighting the resilience of aluminium scrap prices. Meanwhile, affected by tighter regulatory oversight under the “reverse invoicing” policy, tax compliance costs in the aluminium scrap recycling segment rose sharply. In some regions, as operating procedures have yet to be fully streamlined, the supply of actually compliant, invoice-backed, available cargoes remained tight, and supply-side elasticity was significantly weakened by policy frictions. 

The aluminium scrap market is expected to maintain consolidation at high levels this week, with the mainstream range for shredded aluminium tense scrap, priced based on aluminium content, at RMB 19,800-20,500 per tonne (ex-tax). Policy constraints on the supply side are unlikely to ease in the short term. Tight, compliant cargo supply, coupled with yards holding back cargoes, will continue to underpin prices. On the demand side, peak-season recovery fell short of expectations, downstream wait-and-see sentiment at high prices remained strong, and there was a lack of momentum for large-scale restocking, with just-in-time procurement still the mainstream. Primary aluminium will likely continue to fluctuate under the influence of geopolitical and macro factors. Overall, the tug-of-war between sellers and buyers will persist, and caution is warranted against the risk of wild price swings.

Secondary aluminium alloy: Futures side, before noon yesterday, the most-traded aluminium alloy 2605 contract retreated after a rapid rise and then fluctuated downward. After the opening, prices rose rapidly and touched an intraday high of RMB 23,985 per tonne, then pulled back under pressure, with the intraday low falling to RMB 23,535 per tonne. As of the midday close, it stood at RMB 23,630 per tonne, down 115 yuan from the previous trading day, or 0.48per cent. Spot market, yesterday’s ADC12 market prices were mainly stable. Fluctuations in aluminium prices and aluminium scrap prices narrowed, cost support tended to stabilise, and enterprises generally lacked the motivation to adjust prices. Meanwhile, downstream demand showed no obvious improvement, with procurement still mainly driven by just-in-time needs, and market transactions delivered mediocre performance. In the absence of new macro and fundamental drivers, ADC12 prices are expected to continue moving sideways in a narrow range in the short term. Going forward, close attention should be paid to the impact of developments in the Middle East situation on aluminium prices and downstream consumption performance.

Aluminium market summary: At present, macro geopolitical risks in the global aluminium market continue to escalate, with risk premiums remaining elevated and becoming the core variable dominating market sentiment. From a fundamental perspective, on the supply side, the market has heard reports of further production cuts at an aluminium plant in Bahrain, the Middle East, while the EGA Taweelah smelter in the UAE was attacked on March 28 and suffered severe damage, making the global supply contraction more pronounced. On the demand side, downstream operating rates rebounded further, while the weekly proportion of liquid aluminium was relatively stable. Entering April, as the peak season deepens, the proportion of liquid aluminium is expected to rebound further. On the inventory side, last week the centre of aluminium prices pulled back from the previous period, but wait-and-see sentiment in the market remained strong. Downstream buyers mainly made just-in-time procurement on dips, and aluminium ingot social inventory failed to enter the destocking stage. Approaching late March to early April, attention should be paid to whether aluminium ingot inventory can smoothly enter a destocking cycle under high aluminium prices. Overall, the geopolitical situation in the Middle East remains the core factor affecting the global aluminium market. 

A series of production cuts and damage incidents at Middle Eastern aluminium plants are expected to provide strong upward momentum for aluminium prices in and outside China. Coupled with support from expectations of gradually released peak-season demand in China, aluminium prices are expected to remain in a high-level adjustment pattern in the short term.

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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.