Futures: According to the night session data on Oct. 15, technical analysis showed that the SHFE aluminium 2511 contract fluctuated rangebound during the Oct. 15 night session, closing slightly up 0.05per cent at RMB 20,885 per tonne.
Moving averages indicated the price was below the 5-day MA (20,904) but above the 10-day (20,853), 30-day (20,806), and 60-day MAs (20,699), suggesting short-term pressure but a still bullish medium and long-term trend; trading volume fell to 22,933 lots, below the 5-day, 10-day, and 20-day averages, reflecting low market participation and strong wait-and-see sentiment; the MACD indicator was positive (DIF: 49.20, DEA: 46.28), but the histogram was relatively small, indicating weak momentum. Resistance is seen near the recent high range of 20,900-21,000, support near 20,800-20,850, with key support around the 60-day MA at 20,699. Overall, the night session saw limited volatility, with no clear directional breakout technically.
Primary aluminium Market: SHFE aluminium retreated after a rapid rise in the morning session, trading broadly in the range of RMB 20,850-20,930 per tonne. In East China, recent aluminium ingot arrivals were relatively small, with continued destocking, leading to slightly tight spot supply. Suppliers refused to budge on prices and were reluctant to sell, coupled with large buyers entering to purchase, narrowing spot discounts. Actual transactions were at a premium of about RMB 10-20 per tonne against the SMM average price.
The East China market selling sentiment index was 3.21 on Wednesday, up 0.14 W-o-W; the buying sentiment index was 3.18, up 0.25 W-o-W. SMM A00 aluminium was quoted at RMB 20,920 per tonne on Wednesday, up RMB 20 per tonne from the previous trading day, at a premium of about RMB 30 per tonne against the 2510 contract and a discount of RMB 20 per tonne against the 2511 contract, up RMB 20 per tonne from the previous day. In central China, downstream purchasing enthusiasm improved slightly. Before the market opened, trading sentiment was relatively sluggish, with actual transactions mainly at a discount of RMB 10-20 per tonne against the SMM average price. Later, purchasing increased, and some traders began stockpiling, improving the actual premiums and discounts to around parity to a discount of RMB10 per tonne against the SMM average price.
The central China market selling sentiment index was 2.73 on Wednesday, up 0.01 W-o-W; the buying sentiment index was 2.58, up 0.01 W-o-W. SMM central China A00 was recorded at 20,850 per tonne, up RMB 10 per tonne from the previous trading day, at a discount of 40 per tonne against the October contract and a discount of RMB 90 per tonne against the November contract, up RMB 10 per tonne from the previous day. The Henan-Shanghai price spread narrowed by RMB 10 per tonne W-o-W to RMB -70 per tonne.
Recycled aluminium Raw Materials: Spot primary aluminium prices rose slightly on Wednesday compared to the previous trading day, with SMM A00 spot aluminium closing at RMB 20,920 per tonne, while aluminium scrap market prices held flat overall. With the traditional peak season half over, tight supply remains the main theme in the scrap market, keeping procurement prices high, though the sustainability of these high levels remains to be seen. On Wednesday, baled UBC aluminium scrap was quoted in a concentrated range of RMB 15,850–16,350 per tonne (excluding tax), while shredded aluminium tensile scrap (priced based on aluminium content) was quoted in a concentrated range of RMB 17,300–17,800 per tonne (excluding tax). Prices for baled UBC, shredded aluminium tensile scrap (priced based on aluminium content), scrap wheel hub, and mechanical casting aluminium scrap remained flat W-o-W.
Divergent views emerged regarding the subsequent trend of aluminium scrap prices. Some participants in the secondary aluminium industry believe that after the National Day holiday, aluminium scrap prices will maintain a strong fluctuating trend, as the tight supply fundamentals are unlikely to ease in the short term, providing solid support for prices. In October, aluminium scrap prices are expected to be guided higher by primary aluminium prices. However, other feedback suggests that downstream demand remains stable with a positive trend, but scrap utilisation enterprises' acceptance of high-priced raw materials and their inclination to drive down prices persist, which may curb the upside potential for prices. Based on SMM's comprehensive assessment, the overall aluminium scrap market in October is expected to hold up well, with the mainstream price range for shredded aluminium tensile scrap (priced based on aluminium content) projected to hover around RMB 17,500–18,000 per tonne. The market should closely monitor the sustainability of post-holiday downstream demand and further guidance from primary aluminium price trends.
Secondary aluminium Alloy: On Wednesday, aluminium prices continued to rebound, while secondary aluminium alloy enterprises showed divergent quotations—some raised prices by RMB 100 per tonne due to cost pressures, while others held steady and adopted a wait-and-see approach. Currently, raw material supply remains tight, and cost pressures on enterprises persist. Demand remains stable with a positive trend, supporting price resilience, but inventory pressure is constraining the upward momentum. In the short term, ADC12 prices are expected to maintain a fluctuating trend. The pace of improvement in raw material supply, changes in social inventory, and the recovery rhythm of post-holiday demand will be key factors influencing price trends.
Aluminium market summary: Macro Front: Data released by the National Bureau of Statistics (NBS) showed that China's CPI rose 0.1per cent M-o-M in September, fell 0.3per cent YoY, while the core CPI increased 1per cent YoY, marking the fifth consecutive month of expansion and the first time in nearly 19 months that the growth rate returned to 1per cent. (Bullish ★) The U.S. stated that whether to impose 100per cent tariffs on China depends on China's actions.
In response, China's Ministry of Foreign Affairs remarked that the U.S. is simultaneously seeking dialogue while threatening to impose hefty tariffs and introduce new restrictions, which is not the right way to engage with China. China urged the U.S. to correct its wrong practices as soon as possible and resolve issues through dialogue and consultation. Regarding the EU's intention to force Chinese companies to transfer technology to European firms, China opposes protectionist and discriminatory practices under the guise of enhancing competitiveness. (Neutral ★) Fundamentals: After entering October, some aluminium enterprises in northern China reported that, driven by peak season demand for downstream processed products, the proportion of liquid aluminium direct supply is expected to increase. This will directly keep aluminium ingot production at low levels, reducing the supply of spot aluminium ingots in the market and providing supply-side support for aluminium prices. Inventory side, according to SMM data, domestic aluminium ingot social inventory was approximately 627,000 tonnes as of October 16. On a weekly basis, it decreased by 23,000 tonnes from October 13.
From a seasonal perspective, no significant seasonal inventory buildup occurred this year, with inventory remaining at low levels for the same period. Downstream consumption shows robust resilience during the peak season, and spot discounts are limited. Against the backdrop of seasonal peak demand, even with aluminium prices rising to a high of RMB 21,000 per tonne, the discount in the spot market is not substantial (the spot-futures price spread did not widen significantly), further confirming demand's supportive effect on prices. Comprehensive Outlook: Macro front, China's core CPI growth expanded to 1per cent in September, returning to 1per cent for the first time in nearly 19 months, indicating a mild recovery in domestic demand, which is positive for aluminium prices; however, uncertainties arise from Sino-US trade friction and EU technical disputes.
Fundamentals side, in October, northern aluminium enterprises increased the proportion of direct liquid aluminium supply, keeping aluminium ingot production at low levels and tightening supply; SMM data shows inventory decreased by 23,000 tonne W-o-W to 627,000 tonne, remaining at historically low levels for the period, with downstream peak season consumption showing resilience and spot discounts limited, confirming demand's support for prices. Overall, driven by tight supply, inventory drawdown, and peak season demand, aluminium prices are expected to hold up well in the short term, but vigilance is needed against potential disruptions to market sentiment from macro risks.
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.
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