Futures: SHFE aluminium closed at RMB 25,020 per tonne in the night session, up 1.36 per cent. Prices stood above all moving averages (MA5=24,742, MA10=24,726, MA40=24,407, MA60=24,375), with the moving average system in a bullish oscillating alignment. The MACD indicator DIF (125.21) and DEA (84) formed a golden cross upward, confirming a clear bullish trend with continuously expanding red bars. The suggested core trading range for SHFE aluminium is 24,600-25,100. LME aluminium closed at USD 3,625 per tonne, up 17.50 per cent. Prices stood above all moving averages: MA5 (3,536.4), MA10 (3,502.65), MA40 (3,315.55), and MA60 (3,254.43), with the moving average system in a bullish alignment, establishing a short-term strong rebound pattern. The MACD indicator DIF (81.8) and DEA (61.87) formed a golden cross, with both lines rising in tandem. The suggested core trading range for LME aluminium is 3,500-3,650.

Macro Front: Ex-China, the US Central Command announced that the US military would impose a blockade in the Gulf of Oman and the Arabian Sea east of the Strait of Hormuz, applicable to all vessels regardless of flag. In China, in March, CPI rose 1.0 per cent YoY, maintaining a mild increase, with the growth rate higher than the Q1 average. The Producer Price Index (PPI) rose 0.5 per cent YoY, marking the first increase after 41 consecutive months of decline.

Fundamentals: The supply side, excluding China, is directly impacted by geopolitical conflicts, and Middle Eastern aluminium enterprises cut production. UAE's EGA smelter and Alba were successively struck by Iranian missiles and drones, and combined with Qatalum's initiated production cut process, the three smelters had a combined production cut of approximately 2.43 million tonnes. The global aluminium supply gap is expected to widen, with concerns over ex-China supply continuing to escalate. LME inventory maintained a downward trend, with the latest data showing destocking to 399,200 tonnes.

In March, the share of available Russian aluminium inventory in LME warehouses surged from 60 per cent in February to 92 per cent in March. In China, the proportion of liquid aluminium rebounded in March as downstream sectors fully resumed work after the holiday, up significantly by 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 Monday, China's aluminium ingot social inventory saw an inventory buildup of 11,000 tonnes w-o-w, with short-term inventory remaining at a relatively ample level.

Primary aluminium Market: In the morning session, SHFE aluminium 2604 fluctuated downward, with the trading centre moving lower compared to the previous day. Affected by some futures-spot warrant-building shipments, overall selling sentiment in the market was relatively high, available cargoes in the market were fairly sufficient, and market transactions declined after the opening. Transactions were mainly concentrated around a discount of RMB 10 per tonne to the SMM A00 aluminium average price. Yesterday, the East China market shipment sentiment index was 3.41, up 0.17 w-o-w; the purchasing sentiment index was 3.01, flat w-o-w. Yesterday, aluminium futures prices pulled back. Combined with persistently high inventory levels in central China, traders and downstream processing enterprises held relatively pessimistic expectations for price increases. Overall buying sentiment in the market was poor, and suppliers tended to dump shipments in bulk when the price spread between the two regions and East China was relatively small, driving market offers steadily lower. Ultimately, overall offers in the central China market fell from a premium of RMB 20  to the central China price all the way down to a discount of RMB 10  to the central China price. Yesterday, the central China market shipment sentiment index was 2.77, up 0.01 w-o-w; the purchasing sentiment index was 2.4, down 0.04 w-o-w.

Aluminium scrap: Yesterday, spot primary aluminium edged down from the previous trading day, and the aluminium scrap market overall followed suit. Yesterday, the tightening regulatory stance on the "reverse invoicing" policy remained unchanged, compliance costs in the aluminium scrap recycling chain stayed elevated, and actually available invoiced cargoes remained tight. Demand side, the divergence in shipments between aluminium tensile scrap and wrought aluminium alloy scrap intensified. For aluminium tensile scrap materials such as shredded aluminium tensile scrap and ADC12 aluminium shavings, downstream scrap utilisation enterprises, including secondary alloy producers, mostly maintained purchasing as needed with low inventory operations. For wrought aluminium alloy scrap materials such as baled UBC and 5-series/3-series plate off-cuts, downstream secondary aluminium plate/sheet and strip enterprises were in peak production season with relatively high stockpiling enthusiasm. However, overall, high price levels combined with wild swings in aluminium prices continued to suppress purchasing enthusiasm among scrap utilisation enterprises.

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 2,948 per tonne, and the price difference between A00 aluminium and shredded aluminium tensile scrap was RMB 1,658 per tonne. The aluminium scrap market is expected to hover at highs in a consolidation pattern next week, with the mainstream range for shredded aluminium tensile scrap (priced based on aluminium content) around RMB 20,800-21,300 per tonne (tax-exclusive). Supply-side policy constraints are unlikely to ease in the short term, and tight compliant cargoes combined with suppliers holding back cargoes continue to underpin prices. Demand side, the divergence between aluminium tensile scrap and wrought aluminium alloy scrap is set to continue. Primary aluminium remains subject to fluctuations due to factors such as Middle East geopolitical conflicts. Combined with a lacklustre downstream peak-season recovery, the overall tug-of-war between sellers and buyers continues. Caution is warranted against market risks arising from aluminium price fluctuations at highs and poor cargo circulation.

Secondary aluminium alloy: Spot cargo side, the ADC12 market overall ran stable on Monday. Affected by primary aluminium prices moving sideways, cost-side drivers were limited. Enterprises generally lacked the willingness to actively adjust prices, mostly adopting a wait-and-see stance. Demand side, downstream purchasing maintained a rigid-demand pace, transaction performance showed no notable improvement, and overall market trading sentiment remained subdued. Against the backdrop of weak supply and demand and converging cost fluctuations, ADC12 prices are likely to continue to move sideways in the near term.

Aluminium market summary: Supply side, the substantial damage previously inflicted has become 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 expected global aluminium supply gap widened 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, macro-level strait transit restrictions and conflict escalation risks resonated with fundamental supply hard damage and low global inventory, jointly providing strong bottom support for aluminium prices. However, weak interest rate cut expectations, higher-than-expected aluminium ingot inventory buildup in China, and adverse expectations on consumption and inflation from recent high fluctuations in oil prices all notably weighed on the upside room for aluminium prices, with aluminium prices fluctuating at highs in the near 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