Futures: During the night session on November 5, the most-traded SHFE aluminium contract opened lower, then surged before entering a consolidation phase. The 2512 contract opened at RMB 21,355 per tonne, hit a high of RMB 21,475 per tonne, touched a low of RMB 21,330 per tonne, and closed at RMB 21,450 per tonne, up 0.26per cent from the previous close. Technically, the MA system showed a bullish alignment (MA5: 21,442 > MA10: 21,347.5 > MA20: 21,158 > MA60: 20,861.42), but a death cross formed between the DIFF (115.12) and DEA (116.08) on the 4-hour MACD candlestick indicator. In terms of trend, SHFE aluminium pulled back after hitting a recent high of 21,655, facing short-term technical correction pressure. The night session closed at RMB 21,450 per tonne, converging with the MA5, indicating weakened short-term bullish momentum and highlighting the need to watch for near-term correction risks.
Macro Front: At the regular press conference held yesterday, Foreign Ministry Spokesperson Mao Ning stated that China’s policy toward the US remains stable, and China always views and handles China-US relations based on the principles of mutual respect, peaceful coexistence, and win-win cooperation. At the same time, China firmly safeguards its own sovereignty, security, and development interests. Maintaining the sound and stable development of China-US relations aligns with the fundamental interests of both peoples and is widely expected by the international community. (Neutral) According to the National Energy Administration, by the end of September, China’s new-type energy storage installations exceeded 100 million kW, up more than 30 times compared to the end of the 13th Five-Year Plan period. The installation scale accounted for over 40per cent of the global total, ranking first in the world. (Bullish★)
Fundamentals: Inventory side, SMM statistics showed that spot aluminium ingot inventories in major domestic consumption areas totalled 622,000 tonnes today, down 5,000 tonnes from Monday but up 3,000 tonnes W-o-W.
Primary aluminium Market: On Wednesday, spot primary aluminium prices fell compared to the previous trading day, with SMM A00 aluminium closing at RMB 21,300 per tonne. Aluminium scrap prices followed the decline. As the traditional peak season ended, downstream demand showed clear divergence. Demand for scrap used in cast aluminium alloys remained robust, providing more consumption support, while demand for scrap used in wrought aluminium alloys began to show signs of weakening. However, tight market supply remained the main theme, keeping procurement prices high, though the sustainability of these high levels remains to be seen. On Wednesday, baled UBC was quoted in a range of RMB 16,000-16,650 per tonne (ex-tax), and shredded aluminium tensile scrap (priced based on aluminium content) was quoted at RMB 17,500-18,000 per tonne (ex-tax). Prices for baled UBC, clean tapping aluminium wire, shredded aluminium tensile scrap (priced based on aluminium content), scrap wheel hub, and mechanical casting aluminium scrap dropped RMB 50-150 per tonne W-o-W on Wednesday.
Spot aluminium prices pulled back this Wednesday, and aluminium scrap prices in Shanghai, Zhejiang, Jiangsu, and other regions followed with a slight correction. Regarding the price difference between A00 aluminium and aluminium scrap, the price difference between A00 aluminium and mechanical casting aluminium scrap in Shanghai narrowed by RMB 140 yuan from the previous trading day to RMB 2,565 per tonne, while the price difference between A00 aluminium and mixed aluminium extrusion scrap free of paint in Foshan widened by RMB 22 per tonne from the previous trading day to RMB 2,304 per tonne. The aluminium scrap market is expected to hold up well this week, with the mainstream price range for shredded aluminium tensile scrap (priced based on aluminium content) likely shifting up to RMB 18,000-18,500 per tonne. If primary aluminium prices continue to rise, it will further transmit positive effects. Combined with the restocking demand of secondary aluminium enterprises amid low inventory, the tight supply situation is unlikely to change in the short term.
Demand side, the end of the traditional peak season and environmental protection-driven production restrictions, suppressing demand for wrought aluminium alloy scrap, may intensify market divergence. Close attention should be paid to the procurement pace of raw materials by secondary aluminium enterprises as they enter the off-season and the sustainability of end-user orders. If primary aluminium prices retreat after a rapid rise, the aluminium scrap market will face pullback pressure, especially for wrought aluminium alloy scrap varieties, which are at greater risk due to environmental protection-driven production restrictions. Overall, the market will continue the tug-of-war between sellers and buyers, and it is recommended to closely track the trend of primary aluminium and policy developments.
Recycled aluminium Raw Materials: Spot primary aluminium prices rose on Tuesday this week compared to the previous trading day, with the SMM A00 spot price closing at RMB 21,440 per tonne. Aluminium scrap market prices followed the upward trend of aluminium prices. As the traditional peak season ended, downstream demand showed significant divergence. Demand for aluminium scrap used in cast aluminium alloys remained robust, providing more consumption support, while demand for aluminium scrap used in wrought aluminium alloys began to show signs of weakening. However, tight market supply remained the main theme, keeping purchase prices high, though the sustainability of these high levels needs consideration. On Tuesday this week, baled UBC was quoted in a range of RMB 16,100-16,750 per tonne (tax excluded), and shredded aluminium tensile scrap (priced based on aluminium content) was quoted in a range of RMB 17,900-18,250 per tonne (tax excluded). Prices for baled UBC, shredded aluminium tensile scrap (priced based on aluminium content), scrap wheel hub, and mechanical casting aluminium scrap held steady today compared to the previous day.
Spot aluminium prices held steady on Tuesday this week, and aluminium scrap prices in major producing regions remained largely stable. Regarding the price difference between A00 aluminium and aluminium scrap, the price difference between A00 aluminium and mechanical casting aluminium scrap in Shanghai was recorded at RMB 2,702 per tonne, while the price difference between A00 aluminium and mixed aluminium extrusion scrap free of paint in Foshan widened by RMB 10 per tonne from the previous trading day to RMB 2,326 per tonne. The aluminium scrap market is expected to hold up well this week, with the mainstream price range for shredded aluminium tensile scrap (priced based on aluminium content) likely shifting up to RMB 18,000-18,500 per tonne. If primary aluminium prices continue to rise, it will further transmit positive effects.
Combined with the restocking demand of secondary aluminium enterprises amid low inventory, the tight supply situation is unlikely to change in the short term. Demand side, the end of the traditional peak season and environmental protection-driven production restrictions suppressing demand for wrought aluminium alloy scrap may intensify market divergence. Close attention should be paid to the procurement pace of raw materials by secondary aluminium enterprises as they enter the off-season and the sustainability of end-user orders. If primary aluminium prices retreat after a rapid rise, the aluminium scrap market will face pullback pressure, especially for wrought aluminium alloy scrap varieties, which are at greater risk due to environmental protection-driven production restrictions. Overall, the market is expected to continue the tug-of-war between sellers and buyers, and it is advisable to closely track the movement of primary aluminium prices and policy developments.
Secondary aluminium Alloy: This Wednesday, the SMM A00 aluminium spot price fell by RMB 140 per tonne to RMB 21,300 per tonne. In the secondary aluminium market, the ADC12 price dropped by RMB 50 per tonne to 21,350 per tonne. Against the backdrop of aluminium prices retreating from highs, market quotations diverged: some enterprises quickly followed with a decrease of RMB 100 per tonne, while others maintained their quotes and adopted a wait-and-see approach. Due to recent intensified price volatility, downstream procurement has become more cautious, with restocking primarily driven by rigid demand. Raw material supply remains tight, and procurement costs for secondary aluminium plants stay elevated. Coupled with support from the supply side, ADC12 prices are expected to remain firm in the short term.
Aluminium market summary: On the macro front, both domestic and overseas macro sentiment remained relatively optimistic. Supply side, domestic operating aluminium capacity saw limited changes. Overseas, an overseas aluminium smelter cut production by 210,000 tonnes, with further reductions expected in March 2026, reigniting concerns over tight supply. In the medium term, attention should be paid to the ramp-up of aluminium projects in Indonesia. Demand side, as aluminium prices are fluctuating at highs and severe haze in central China has led to the rollout of environmental protection-driven production restriction policies, demand has been somewhat suppressed. Monitor the destocking cycle of finished product inventories at downstream processing plants amid high aluminium prices. Overall, with aluminium prices currently high, downstream processing enterprises are prioritising the reduction of finished product inventories, leading to weaker demand for raw materials. However, aluminium ingot inventories remain relatively low. In the short term, fundamental factors provide limited impetus for aluminium price movements, while domestic and overseas macro sentiment remains relatively optimistic.
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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