Futures: Overnight, the most-traded SHFE aluminium 2505 contract opened at RMB 20,425 per tonne, with a high of RMB 20,465 per tonne, a low of RMB 20,365 per tonne, and closed at RMB 20,415 per tonne, down RMB 70 per tonne, or 0.34 per cent. Yesterday, LME aluminium opened at USD 2,542 per tonne, with a high of USD 2,551.5 per tonne, a low of USD 2,502 per tonne, and closed at USD 2,504.5 per tonne, down USD 34 per tonne, or 1.34 per cent.
Macro: (1) Huang Yun, spokesperson for the State Taxation Administration, revealed at a press conference on April 1 that the administration plans to promote the ‘buy and refund’ policy for departure tax refunds nationwide. (Neutral) (2) The White House stated that the tariffs announced by Trump on April 2 will take effect immediately. Trump will deliver a speech at the Rose Garden at 4 PM local time on Wednesday (04:00 Beijing time on Thursday). (Bearish★) (3) Canadian Prime Minister Carney said that if the US imposes tariffs as scheduled on April 2, Canada will take countermeasures. (Bearish★)
Fundamentals: (1) According to SMM statistics, domestic aluminium production in March 2025 (31 days) increased 3.7 per cent Y-o-Y and 11.2 per cent M-o-M. The proportion of liquid aluminium in domestic aluminium smelters rebounded to normal levels, with the industry's liquid aluminium proportion up 3.2 percentage points M-o-M and 0.15 percentage points Y-o-Y to 74.2 per cent. (Bearish★) (2) China's metallurgical-grade alumina production in March 2025 (31 days) increased 8.86 per cent M-o-M and 11.32 per cent Y-o-Y. By the end of March, China's metallurgical-grade alumina existing capacity was around 105.02 million tonnes, with actual operating capacity down 1.68 per cent M-o-M and the operating rate at 84.64 per cent. (Bearish★)
Primary aluminium market: On Tuesday morning, aluminium prices fluctuated rangebound around RMB 20,450 per tonne, and returned to around RMB 20,550 per tonne in the second session. In the spot market, downstream in east China maintained just-in-time procurement, and the market was still impacted by low-priced sources and hedging warrants, with SMM A00 trading mainly at parity. SMM A00 was at parity against the SHFE aluminium 2504 contract, flat from the previous trading day, and SMM A00 aluminium ingot was recorded at RMB 20,560 per tonne, flat from the previous trading day. In central China, after a sharp decline in aluminium prices, downstream restocking increased, and SHFE aluminium turned into a backwardation structure. With the spot-futures price spread widening, suppliers were more active in selling, and the market fell from a premium of RMB 20 per tonne against central China to near parity. SMM central China A00 was recorded at RMB 20,490 per tonne against the SHFE aluminium 2504 contract, flat from the previous trading day, with the Henan-Shanghai price spread at RMB -70 per tonne. Actual market transactions were at parity to a premium of RMB 10 per tonne against SMM central China prices, and at RMB -70 per tonne against the 2504 contract.
Secondary aluminium raw materials: On Tuesday, spot primary aluminium was flat from the previous trading day at RMB 20,560 per tonne, and aluminium scrap prices were mostly flat with aluminium prices. On Tuesday, baled UBC was flat at RMB 15,300-15,850 per tonne (excluding tax), and shredded aluminium tense scrap was quoted at RMB 16,250-17,100 per tonne (excluding tax). On Tuesday, aluminium scrap prices were mostly flat, with downstream demand remaining sluggish, and scrap utilization enterprises mainly making just-in-time procurement. Overall market transactions were moderate. In the short term, aluminium scrap prices may follow primary aluminium in narrow fluctuations.
Secondary aluminium alloy: On Tuesday, SMM A00 aluminium prices were flat from the previous trading day at RMB 20,560 per tonne, and domestic SMM ADC12 prices were flat in the range of RMB 20,900-21,100 per tonne. Currently, end-use consumption momentum is insufficient, and the downward pressure on aluminium prices is being transmitted. Downstream enterprises generally maintain just-in-time procurement. Due to insufficient orders, production losses, or funding pressure, some enterprises have started to lower their operating rates. Considering the balance between cost support and weak demand, it is expected that aluminium alloy prices will maintain a narrow fluctuating trend in the short term.
Summary: In recent weeks, macro-wise, as Trump has been escalating and fluctuating on tariff policies, concerns about a US economic recession have intensified. On the fundamentals side, the aluminium industry chain remains mainly bullish, with the seasonal destocking trend of ‘Golden March and Silver April’ becoming more evident, and aluminium ingot inventories continuing to decline to around 800,000 tonnes.
End-use consumption such as NEVs is steadily growing, and downstream restocking demand has also warmed up. As the peak consumption season approaches, order volumes and operating rates in most sectors have rebounded, and the continuous destocking of social aluminium ingot inventories has provided bottom support for aluminium prices.
However, in the short term, the market is still somewhat suppressed by external bearish factors, and with the full implementation of US tariff policies imminent, market sentiment remains cautious. In the short term, aluminium prices will maintain a fluctuating trend. Continued close attention should be paid to changes in macro sentiment and the actual release of downstream demand.
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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