Futures: The night session on March 11 closed at RMB 25,315 per tonne, up 0.68 per cent, extending its strength. Prices held above all moving averages, with MA5 (25,015) and MA10 (24,689) in a bullish alignment, keeping the medium-term uptrend intact. The MACD indicator showed DIF (349.81) and DEA (221.57) accelerating higher, while the histogram expanded to 256.49, indicating continued strengthening in bullish momentum. The recommended core trading range for SHFE aluminium is 25,100-25,500. LME aluminium closed at USD 3,457per tonne, surging 1.68 per cent and breaking above the previous high. Prices moved well above the moving average system, including MA5 (3,393.7), with a clear bullish alignment. The MACD indicator showed DIF (83.41) and DEA (52.41) forming a bullish crossover and moving higher, while the histogram expanded to 61.99, indicating ample upward momentum. The recommended core trading range for LME aluminium is 3,420-3,490.

Macro front: US President Trump said there were “almost no targets left to strike” in Iran and that US military operations against Iran were “about to end.” However, US and Israeli officials said they had not yet received any internal instructions to halt military operations. US Central Command issued a statement warning of possible strikes on Iranian civilian ports. A spokesperson for Iran’s armed forces said that if its ports were threatened, it would strike all ports and terminals in the region. (Neutral)

Fundamentals: Supply side, newly commissioned aluminium projects in China, Indonesia, and Angola continued to ramp up production, but escalating geopolitical conflict in the Middle East may have already affected production or shipments at some aluminium plants, and daily average production is expected to decline. Demand side, as downstream sectors gradually resumed operations after the holiday, demand recovered, and the proportion of liquid aluminium rebounded significantly, with the weekly proportion rising by about 8 percentage points w-o-w. Weekly downstream operating rates increased further. Specifically, power grid order deliveries in March had clear expectations, supporting a solid recovery in demand for aluminium wire and cable; demand for can stock, automobiles, battery, and other products continued to recover, driving demand improvement in related sectors; construction demand recovered relatively slowly; with export tax rebates for PV products to be canceled from April 1, the relatively high operating rate in the PV industry is expected to continue through month-end March. On the inventory side, the inventory on Thursday this week increased by 23,000 tonnes from Monday this week. Aluminium casting ingot volume is expected to remain high in March. In addition, some material has yet to enter warehouses, and part of the finished product inventories at aluminium smelters have not yet been shipped to social warehouses. In the short term, the inventory buildup trend in China’s social inventory of aluminium ingot is expected to continue, with the post-holiday peak still likely to reach 1.35-1.4 million tonnes.

Primary aluminium market: SHFE aluminium 2603 strengthened in early trading, with the price centre rising sharply from the previous trading day. Market shipment sentiment improved, and buying sentiment also strengthened, but high aluminium prices suppressed downstream demand, leaving overall procurement demand still at a relatively weak level. Market premiums continued to decline from the opening. Yesterday, mainstream transaction prices were concentrated at discounts of RMB 20 per tonne to parity with the average price. Yesterday, the East China market shipments sentiment index was 3.27, up 0.08 m-o-m; the purchasing sentiment index was 2.66, up 0.13 m-o-m. In recent days, the SHFE aluminium front-month contract saw large fluctuations and surged sharply yesterday. In the central China market, buying sentiment among downstream processing enterprises weakened, but bullish traders provided limited support to purchase sentiment. Overall market trading volume declined from the previous two days, with wait-and-see sentiment still dominating. Ultimately, the actual transaction price range in the central China market hovered around parity with the central China price, at a discount of RMB 20  to the central China price. Yesterday, the central China market shipments sentiment index was 2.64, up 0.06 m-o-m; the purchasing sentiment index was 2.34, down 0.08 m-o-m.

Secondary aluminium raw materials: Persistent fluctuations in geopolitical risks drove spot primary aluminium sharply higher by RMB 560 per tonne yesterday from the previous trading day, and the aluminium scrap market rose across the board in tandem. Against the backdrop of sharp aluminium price fluctuations, sentiment toward price adjustments varied across regions. East China followed the rise quickly, with single-day gains reaching RMB 300-500 per tonne, while central China and south China adjusted prices by RMB 200-300 per tonne on the day. Although it is now the traditional peak season, domestic aluminium scrap yards and downstream scrap utilisation enterprises maintained a lukewarm production pace, and actual raw material restocking fell short of expectations due to weaker-than-expected recovery in end-user orders and wild swings in prices. On the policy side, recycling enterprises lacked clear expectations for the specific implementation rules of “reverse invoicing,” and aluminium scrap circulation is expected to tighten further. It was expected that the aluminium scrap market would maintain high-level, strong fluctuations this week. After the holiday, production order gradually recovered and supply release became further more ample, but downstream processing enterprises saw a slow recovery in orders. Overall, transactions were expected to remain sluggish, and the tug-of-war between sellers and buyers was expected to intensify in the short term. Close attention should be paid to the impact of the US-Iran conflict on primary aluminium supply and transportation, progress in the downstream resumption of work, and changes in recycling policies, with vigilance against intensifying price fluctuation risks.

Secondary aluminium alloy: Futures side, aluminium alloy 2604 fluctuated upward after opening higher yesterday, hitting an intraday high of RMB 24,125  at one point before pulling back, and then maintaining narrow consolidation in the afternoon. It finally closed at RMB 23,885, up RMB 205 per tonne from the previous close, or 0.87 per cent. Trading volume was 8,158 lots, open interest increased slightly to 5,900 lots, and bullish sentiment was relatively strong. In the spot market, boosted by the rebound in futures prices, ADC12 quotations moved higher across the board yesterday, with the SMM ADC12 average price raised by RMB 300 per tonne. Driven by the cost side, producers actively recouped earlier losses and generally raised prices by RMB 200-400 per tonne. However, affected by wild swings in prices during the week, downstream purchasing sentiment remained cautious, with most participants maintaining a wait-and-see stance and restocking only for rigid demand, while the overall market transaction pace remained steady. Against the backdrop of cost support and a mild supply release in the short term, ADC12 prices are expected to continue to hold up well.

Aluminium market summary: Macro front, the Middle East situation remained deadlocked, with conflicting statements from both the U.S. and Iran, while the conflict did not materially ease. Escalating threats to ports suggested that supply chain risks still persisted. Demand side, demand recovered at an accelerated pace after the holiday. The proportion of liquid aluminium rebounded sharply, downstream operating rates increased further, and demand from the power grid, can stock, automotive, battery and other sectors recovered well, while the PV installation rush also provided short-term support. However, inventory still remained under pressure. Inventory continued to build this week, and March casting ingot output stayed high. The inventory buildup trend is expected to continue, with the post-holiday peak set to reach 1.35-1.4 million tonnes, constraining upside room for prices. Overall, macro geopolitical risks provided bottom support for prices, while the continued buildup in China's social inventory weighed on aluminium prices. However, the geopolitical situation in the Middle East still remained unclear. If the geopolitical conflict continues, expectations for a tighter global aluminium supply will remain strong, and aluminium prices will still have strong upward momentum. In the short term, aluminium prices will still mainly hold up well.

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.