Futures: On Friday night, the most-traded SHFE aluminium 2506 contract opened at RMB 19,700 per tonne, with a high of RMB 19,720 per tonne and a low of RMB 19,615 per tonne, closing at RMB 19,690 per tonne, up RMB 50 per tonne or 0.25 per cent from the previous close. On Friday, LME aluminium opened at USD2,366 per tonne, with a high of USD 2,419 per tonne and a low of USD 2,355 per tonne, closing at USD 2,397 per tonne, up USD 28 per tonne or 1.18 per cent.
Macro: (1) Teams from China and the EU have begun contact on EV negotiations, and the EU may cancel anti-subsidy duties on Chinese-made EVs. (Bullish★) (2) On April 11, the Customs Tariff Commission of the State Council announced that from April 12, 2025, the tariff rate on imports from the US will increase from 84% to 125%. The US will continue to impose additional tariffs, and China will not respond. (Bearish★) (3) On April 12, Eastern Time, the US released a memorandum exempting certain products such as computers, smartphones, semiconductor manufacturing equipment, and integrated circuits from 'reciprocal tariffs'. China is assessing the impact. This is the second adjustment to the policy since the US temporarily suspended high "reciprocal tariffs" on some trading partners on April 10. This is a small step by the US to correct its unilateral "reciprocal tariff" practices. (Bullish★) (4) On April 11, CAAM released the latest data showing that China's auto production and sales in Q1 reached 7.561 million and 7.47 million units, up 14.5% and 11.2% YoY, respectively. NEV sales accounted for 41.2% of total new car sales. (Bullish★)
Fundamentals: (1) Last week, the overall operating rate of China's aluminium downstream processing industry fell 0.38 per cent M-o-M to 62.2 per cent. The operating rate weakened in multiple sectors due to sluggish demand, volatile aluminium prices, and trade friction. SMM predicts the operating rate may drop to 61.5 per cent next week. (Bearish★) (2) According to SMM, on April 11, aluminium ingot inventories in Guangdong, Wuxi, and Gongyi totaled 605,400 tonnes, down 11,100 tonnes from the previous day. SMM expects that by mid-April, despite slight inventory buildup after the Qingming Festival, domestic aluminium ingot inventories will likely continue the destocking trend, possibly falling to 700,000-750,000 tonnes. Whether the destocking trend will continue in the second half of April depends on the import window dynamics and whether domestic inventory performance will be affected by imported goods, as well as the end of the traditional peak season "Golden March and Silver April" and whether outflows from warehouses will remain strong. (Bullish★)
Primary aluminium market: On Friday, the SHFE aluminium early session center shifted downward, with spot premiums holding steady. Downstream restocking sentiment improved over the weekend, and transactions improved. Specifically, spot prices in east China traded at the SMM average price; in central China, trading improved, with spot prices trading at parity with the SMM central China average. On April 11, SMM A00 aluminium was quoted at RMB 19,580 per tonne, down RMB 300 per tonne from the previous day, at a premium of RMB 30 per tonne to the April contract, up RMB 20 per tonne from the previous day. The Henan-Shanghai price spread was RMB 60 per tonne, up RMB 10 per tonne from the previous day. SMM central China closed at RMB 19,510 per tonne, down RMB 290 per tonne from the previous day.
Secondary aluminium raw materials: On Friday, the aluminium scrap market followed primary aluminium with a slight decline, with downstream demand not showing a clear peak season trend, maintaining purchasing as needed. Baled UBC was quoted at RMB 14,700-15,300 per tonne (excluding tax), and shredded aluminium tense scrap was quoted at RMB 15,850-17,350 per tonne (excluding tax). By region, Hunan, Hubei, and Foshan showed a clear stance on firm quotes, not following the primary aluminium market in price adjustments. Other regions such as Shanghai, Jiangsu, Henan, and Anhui followed A00 with slight price reductions. By product, shredded aluminium tense scrap and wheel hubs removed from vehicles remained unchanged from the previous day. In the short term, domestic aluminium scrap supply is unlikely to increase, and demand is weakening. Due to the off-peak season effect in the aluminium processing industry, orders are insufficient, and restocking momentum is limited.
Secondary aluminium alloy: On Friday, aluminium prices fell again, and the secondary aluminium market's price adjustment sentiment remained sluggish. Quotes either remained stable or retraced the previous day's RMB 100 per tonne increase. SMM ADC12 prices were lowered by RMB 100 per tonne to the range of RMB 20,500-20,700 per tonne. During the week, volatile aluminium prices intensified downstream companies' risk aversion, with rigid procurement dominating, and market transactions remained sluggish. Secondary aluminium alloy prices are expected to continue in the doldrums in the short term.
Summary: On the macro front, the US dollar fell on Friday, providing support for non-ferrous metals. Recent tariff escalations have impacted the global aluminium trade chain, raising costs and exacerbating supply-demand mismatches. Overseas risk aversion has increased, but earlier bearish factors have been digested, and market concerns about the impact of re-export trade on aluminium demand have eased. The US announced exemptions for certain products from "reciprocal tariffs," partially alleviating previous tariff pressures. On the supply side, although operating capacity for aluminium in April has increased, domestic capacity ceilings limit significant growth, providing bottom support for aluminium prices. Cost side, falling spot alumina prices have reduced the comprehensive cost of aluminium. On the demand side, tariff impacts have created a fear of falling prices, but new orders from end-users have slightly increased after aluminium prices fell, and processing companies' purchasing strength has rebounded, with inventories continuing to destock. Overall, macro sentiment has eased, supporting a rebound in non-ferrous metals, and continued destocking of aluminium inventories supports aluminium prices. In the short term, aluminium prices will maintain a fluctuating trend, and future attention should be paid to tariff policy adjustments and the export situation of aluminium semis and end-users.
【The information provided is for reference only. This article does not constitute direct advice for investment research decisions. Clients should make decisions cautiously and not use this as a substitute for independent judgment. Any decisions made by clients are unrelated to SMM.】
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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