Futures Market: Overnight, the most-traded SHFE aluminium 2505 contract opened at 20,715 per tonne, reached a high of RMB 20,720 per tonne, a low of RMB 20,630 per tonne, and closed at RMB 20,650 per tonne, down RMB 65 per tonne or 0.31per cent. Yesterday, LME aluminum opened at USD 2,690 per tonne hit a high of USD 2,699 per tonne, a low of USD 2,650 per tonne, and closed at USD 2,651 per tonne, down USD 40 per tonne or 1.49 per cent.
Macro Perspective: Overseas, (1) US trade policy - (i) US Treasury Secretary: Reciprocal tariff rates on April 2 will vary by country, with lower rates for some countries; (ii) US Commerce Secretary: Committed to adding export controls to trade agreements. (Bullish★)
(2) Fitch: Downgraded the US 2025 economic growth forecast from 2.1 per cent to 1.7 per cent. Tariff impacts are expected to increase short-term US inflation by 1 percentage point, and the US Fed is expected to delay further interest rate cuts until Q4 2025. (Bearish★)
(3) Domestically, three departments: Support scrappage and renewal of China III and China IV emission standard commercial vehicles, accelerating the replacement of high-standard, low-emission commercial vehicles. (Bullish★)
(4) On March 18, the National Energy Administration released data on electricity consumption for February. From January to February, total electricity consumption nationwide reached 1,556.4 billion kWh, up 1.3 per cent Y-o-Y, with power generation by large-scale industrial enterprises at 1,492.1 billion kWh. (Bullish★)
Fundamentals: (1) According to data released by the General Administration of Customs on March 18, China's aluminium ore and concentrate imports in February 2025 totalled 14.41 million tonnes, up 28.3 per cent Y-o-Y; from January to February, imports totalled 30.62 million tonnes, up 25.6 per cent YoY. (Bearish★)
(2) According to SMM statistics, as of March 18, aluminium ingot inventories in Guangdong were 260,400 tonnes; in Wuxi, 324,000 tonnes; and in Gongyi, 135,000 tonnes, with total inventories across the three regions at 719,400 tonnes, down 1,500 tonnes from the previous working day. (Bullish★)
(3) On March 18, LME aluminium inventories recorded 49,325 tonnes, down 4,025 tonnes or 0.82 per cent from the previous day. (Bullish★)
Primary aluminium market: During yesterday's morning session, the centre of the SHFE front-month aluminium contract gradually shifted downward to around RMB 20,850 per tonne. In the spot market, the absolute price centre in East China moved lower, with no significant improvement in market transactions. Transactions were concentrated around SMM A00 minus RMB 10 per tonne, with downstream maintaining just-in-time procurement.
SMM A00 aluminium ingot was recorded at RMB 20,790 per tonne, down RMB 30 per tonne from the previous trading day. In central China, aluminium prices were previously at highs, leading downstream processing enterprises to accumulate finished product inventories and adopt cautious raw material restocking. Spot premiums in the market were under pressure. Recently, as aluminium prices moved lower, downstream just-in-time procurement increased, but liquidity weakened in central China due to trade risks, limiting upward movement in spot premiums.
SMM Central China A00 aluminium was recorded at RMB 20,660 per tonne, down RMB 30 per tonne from the previous trading day, with the Henan-Shanghai price spread at RMB -130 per tonne. Actual market transactions were on par with or slightly below SMM Central China prices by RMB 10 per tonne. As aluminium prices continued to decline, trading activity slightly improved during the day. Attention should be paid to downstream restocking, as premium centres may recover.
Secondary aluminium raw materials: Yesterday, primary aluminium spot prices fell by RMB 30 per tonne compared to the previous trading day, with SMM A00 spot closing at RMB 20,790 per tonne. The aluminium scrap market followed with slight declines, and downstream maintained purchasing as needed. Yesterday, baled UBC aluminium scrap was quoted at RMB 15,250-16,150 per tonne (excluding tax), and shredded aluminium tense scrap was quoted at RMB 16,450-17,950 per tonne (excluding tax).
In the short term, the domestic aluminium scrap market is expected to remain weak on both supply and demand sides, with no significant improvement. Coupled with high prices for primary and aluminium scrap, downstream will likely continue purchasing as needed, and aluminium scrap prices may fluctuate rangebound in line with primary aluminium.
Secondary aluminium alloy: Yesterday, aluminium prices slightly declined, with SMM A00 aluminum prices down RMB 30 per tonne from the previous trading day to RMB 20,790 per tonne, while secondary aluminium prices remained stable. Domestic SMM ADC12 prices were unchanged from the previous day, staying within the range of RMB 21,200-21,400 per tonne.
Aluminium prices fluctuated narrowly yesterday, and secondary aluminium market quotations remained basically stable. Current downstream actual demand recovery is moderate, with abundant low-priced supply in the market suppressing the upside room for ADC12 prices. However, cost-side support provides some price stability. If demand does not improve significantly, ADC12 prices may face downward pressure due to subsequent cost easing and the impact of low-priced supply in the market.
Summary: From a macro perspective, overseas trade protection and slowing growth create a bearish resonance: US trade policies focus on differentiated tariffs and export controls, while Fitch has downgraded the US 2025 economic growth forecast to 1.7per cent, warning that tariffs may push inflation higher and delay US Fed interest rate cuts to Q4 2025. Domestically, the trade-in policy continues to gain traction, with three departments promoting the scrappage and renewal of high-emission commercial vehicles.
Additionally, total electricity consumption from January to February increased by 1.3 per cent Y-o-Y, maintaining a divergence between domestic and overseas trends. On the fundamentals side, bullish signals in the aluminium industry chain are evident: China's February aluminium ore imports rose 28.3 per cent YoY, aluminium ingot inventories in Guangdong, Wuxi, and Gongyi decreased slightly by 1,500 tonnes to 719,400 tonnes, and LME aluminium inventories fell by 0.82 per cent.
The traditional ‘golden March and silver April’ peak season effect continues to manifest, with ongoing optimisation of the supply-demand structure. In the short term, attention should be paid to adjustment risks, while the medium and long-term bullish logic remains unchanged. Continued focus will be placed on changes in US tariff policies and the actual release of downstream demand.
Note:Â This article has been issued by SMM and has been published by AL Circle in its original form without any modifications or edits to the information.
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