Futures: SHFE aluminium closed at RMB 24,670 per tonne in the night session, up 0.39per cent. The price stood above all moving averages (MA5=24,656, MA10=24,619.5, MA30=24,559.17, MA60=24,351.92), with the moving average system in a bullish alignment. 

The MACD indicator showed a golden cross with DIF (91.95) above DEA (68.71), and the histogram expanded to 46.48, indicating continuously strengthening bullish momentum. The suggested key trading range for SHFE aluminium is 24,500-25,100. LME aluminium closed at USD 3,447.5 per tonne, down 0.79per cent. The price fell below MA5 (3,477.2) but remained above MA10 (3,404.8), MA30 (3,344.08), and MA60 (3,233.28), indicating a short-term pullback while the medium-term bullish structure remained intact. The MACD indicator showed a golden cross with DIF (59.06) above DEA (50.24), but the histogram narrowed to 17.64, suggesting weakening upward momentum. The suggested key trading range for LME aluminium is 3,420-3,500.

Macro front: The US and Iran were set to hold their first round of talks in Pakistan on April 11, but significant differences remained between the two sides on ceasefire terms, mainly centred on Iran's uranium enrichment activities, navigation through the Strait of Hormuz, the Lebanon ceasefire issue, and the withdrawal of US troops from the Middle East. 

The US core PCE price index rose 3per cent YoY in February, narrowing slightly from the previous reading of 3.1per cent, in line with market expectations. Services inflation slowed down notably, with real spending up only 0.1per cent m-o-m. US initial jobless claims increased by 16,000 to 219,000 last week, above market expectations.

Fundamentals: Supply side, outside China, directly impacted by geopolitical conflicts, Middle Eastern aluminium enterprises cut production. Recently, UAE's EGA and Bahrain's Alba were successively hit by missile strikes, with production facilities damaged. The extent of damage was still under comprehensive assessment. The market widely expected 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 rebounded in March as downstream sectors fully resumed work after the holiday, surging 9.3 percentage points m-o-m to 73.7per cent, above 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. This Thursday, China's aluminium ingot social inventory saw an inventory buildup of 35,000 mt w-o-w, 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 mt.

Primary aluminium market: In the morning session, SHFE aluminium 2604 fluctuated downward, with the trading centre shifting lower than the previous day. Affected by declining aluminium prices, sellers raised their offers, and overall market shipment sentiment weakened. As some downstream players held inventory and aluminium prices remained at highs, overall purchasing sentiment also declined yesterday. Market transactions were mainly concentrated at SMM A00 aluminium at a premium of RMB 10-20 per tonne. 

Yesterday, the East China market shipment sentiment index was 3.25, down 0.09 m-o-m; the purchasing sentiment index was 3.24, up 0.56 m-o-m. Yesterday, SHFE aluminium futures prices fluctuated downward in a correction, and the central China market lacked confidence in prices, with a strong wait-and-see atmosphere overall and buying sentiment declining slightly. As futures fell, traders actively shipped out cargoes, but actual transaction prices were weak. Suppliers had a strong willingness to hold prices firm, with offers only edging slightly lower. 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 2.73, flat m-o-m; the purchasing sentiment index was 2.4, down 0.04 m-o-m.

Aluminium scrap: Yesterday, spot primary aluminium fell RMB 160 per tonne from the previous trading day, and the aluminium scrap market followed the decline overall. Yesterday, the tightening regulatory stance on the "reverse invoicing" policy remained unchanged, with compliance costs in the aluminium scrap recycling process staying elevated, and actually available invoiced cargoes remaining tight. Demand side, the divergence in shipments between aluminium tensile scrap and wrought aluminium alloy scrap intensified. For aluminium tensile scrap, 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 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 spread side, the price difference between A00 aluminium and mixed aluminium extrusion scrap free of paint in Foshan was recorded at RMB 3,005 per tonne, and the price difference between A00 aluminium and shredded aluminium tensile scrap was RMB 1,715 per tonne. The aluminium scrap market is expected to hover at highs 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 will continue to underpin prices. Demand side, the divergence between aluminium tensile scrap and wrought aluminium alloy scrap will persist. Primary aluminium remains subject to fluctuations due to factors such as Middle East geopolitical conflicts, and coupled with a lacklustre downstream peak-season recovery, the overall tug-of-war between sellers and buyers will continue. Caution is warranted against market risks arising from aluminium price fluctuations at highs and poor cargo circulation.

Secondary aluminium alloy: Spot cargo side, ADC12 market prices were generally marked down yesterday, with declines concentrated in the range of RMB 100-200 per tonne. The main reasons were the cost side decline driven by the expanding drop in aluminium prices, as well as insufficient support from the demand side. Currently, downstream procurement remains dominated by rigid demand, and market transactions show mediocre performance. Meanwhile, low-priced supplies flowed into some regions, intensifying price competition and further suppressing market confidence. In the short term, demand side weakening is expected, and ADC12 prices still face certain downward pressure.

Aluminium market summary: Macro front, the US and Iran are scheduled to hold their first round of talks on April 11, but significant disagreements remain on core issues such as uranium enrichment and strait navigation, casting doubt on negotiation prospects. Passage through the Strait of Hormuz remains subject to Iranian permit restrictions, with most vessels adopting a wait-and-see approach, and geopolitical risk premiums have not subsided. Supply side, the substantive damage caused earlier is irreversible. 

Aluminium capacity in the Middle East suffered direct military strikes, with UAE's EGA and Bahrain's Alba Aluminium successively attacked and production facilities damaged. The global aluminium supply gap is expected to widen significantly, and concerns over ex-China supply continue to escalate. Meanwhile, China has entered the traditional peak consumption season, with the proportion of liquid aluminium rebounding sharply to 73.7per cent, downstream operating rates rising steadily, and demand side support remaining solid. Overall, the macro perspective of restricted strait passage and conflict escalation risks resonated with the 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 the adverse expectations on consumption and inflation from recent high fluctuations in oil prices have all notably weighed on the upside room for aluminium prices. In the short term, aluminium prices are fluctuating at highs.

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.