Futures: SHFE aluminium closed at RMB 23, 395/tonne in the night session, down 0. 91%, falling below short-term moving averages MA5 (23, 544) and MA10 (23, 522), with the moving average system showing a bearish alignment. The price nears the medium-term key support at MA60 (23, 069. 42). The MACD indicator’s DIF (-23. 3329) accelerated downward after crossing below zero, DEA (117. 8205) pulled back, and the histogram’s negative value expanded to -282. 3068, signaling strengthened bearish momentum. The core trading range for SHFE aluminium is suggested at 23, 200-23, 600. LME aluminium closed at USD 3, 097. 5/tonne, down 0. 63%, fluctuating between MA5 (3, 111. 9) and MA10 (3, 093. 55). After short-term moving averages converged, a downward turn is indicated. Prices remain below MA30 (3, 133. 22) and above MA60 (3, 008. 32), reflecting a stable medium-term structure but weakening short-term trend. MACD’s DIF (9. 0460) and DEA (21. 5155) maintain a death cross, with histogram at -24. 9391, implying ongoing bearish momentum. Core trading range is 3, 080-3, 120. Macro Front: Uncertainty surrounds Trump’s tariff policy. The US House passed a resolution opposing Trump’s tariff increase on Canada, expected to pass Senate, a bullish sign. The US Treasury Secretary reported recent Beijing meetings with Chinese officials preparing for high-level talks, while China’s Ministry of Commerce confirmed ongoing economic and trade communications, also bullish. However, US stocks sharply declined over concerns that AI may hurt future corporate profits, a bearish influence on risk assets. Fundamentals: On supply, domestic and Indonesian aluminium projects steadily increased production, though February output declined month-on-month due to fewer natural days. Approaching Chinese New Year, downstream raw material demand weakened slightly; combined with high aluminium prices suppressing demand, downstream appetite softened. Enterprises showed increased willingness to cast ingots, lowering the share of liquid aluminium in February. Despite higher aluminium ingot warehouse withdrawals year-on-year this week, social inventories continued building, with Thursday’s stocks up 35, 000 tonnes from Monday, increasing inventory pressure. Post-Chinese New Year social inventory peak is expected to be near a three-year high. Primary Aluminium Market: The SHFE aluminium 2602 contract traded higher early on, but overall market sentiment remained weak due to the approaching holiday, with mainstream transactions near average prices plus RMB 10/tonne. Yesterday, eastern China’s shipment sentiment index was 2. 21 (down 0. 08 m-o-m), and purchasing sentiment 2. 33 (up 0. 04 m-o-m). SMM A00 aluminium closed at RMB 23, 350/tonne (+RMB 90), at a discount of RMB 160/tonne vs. 2602 contract (up RMB 30) and RMB 220/tonne vs. 2603 contract. Central China markets saw sluggish transactions. With Chinese New Year nearing, downstream pre-holiday stockpiling ended, replaced by minimal just-in-time procurement. Major suppliers began their holiday, limiting supply circulation, yet some traders bought on dips, pushing prices up. Actual central China transaction premiums ranged RMB 20 to 60 above regional prices. Central China shipment sentiment was 2. 43 (down 0. 14 m-o-m) and purchasing sentiment 2. 09 (down 0. 05 m-o-m).

SMM central China closed at RMB 23, 260/tonne (+RMB 100), at discounts of RMB 250 and RMB 310 vs. 2602 and 2603 contracts, respectively. Henan-Shanghai price spread narrowed by RMB 10 to -RMB 90. Secondary Aluminium Raw Materials: Spot primary aluminium prices dipped slightly, with SMM A00 closing at RMB 23, 350/tonne; scrap prices generally steady. Baled UBC was quoted RMB 16, 850-17, 300/tonne (tax excluded); shredded tensile scrap RMB 19, 000-19, 700/tonne (tax excluded). Price spreads between primary aluminium and scrap remain significant, e. g. , RMB 3, 543/tonne between A00 and mixed extrusion scrap. High aluminium prices curb downstream demand, resulting in lower stockpiling volumes than in previous years. The Chinese New Year holiday was longer than in 2025. Scrap yards and utilisation enterprises gradually suspended operations and shipments. A few delayed arrivals were stored, but market trading was sluggish. Post-holiday aluminium scrap prices are expected to remain elevated (roughly RMB 19, 000-19, 800/tonne for shredded tensile scrap). Supply remains tight due to ongoing holidays and restrained scrap recycling, supporting scrap prices. However, downstream demand dropped month-on-month from January, with transactions expected to be limited to just-in-time restocking. The supply-demand standoff is likely to persist short-term. Attention should focus on downstream work resumption pace post-holiday, as expectations for recovery could stimulate market sentiment, potentially pushing aluminium prices higher but keeping scrap market activity sluggish. Secondary Aluminium Alloy: On futures, the most-traded aluminium alloy 2604 contract opened at RMB 22, 195/tonne, dipped to 22, 085, then rebounded to an intraday high of 22, 295 before consolidating narrowly and closing at RMB 22, 260 (+0. 25%). Volume was 9, 009 lots; open interest decreased by 1, 588 lots mainly due to short covering. Spot prices: A00 aluminium rose RMB 90 to RMB 23, 350; SMM ADC12 steady at RMB 23, 650. Upstream and downstream enterprises gradually entered the Chinese New Year holiday; most smaller secondary aluminium plants shut down furnaces, larger firms began holidays, halting shipments. With simultaneous cooling of supply and demand, spot quotes and transactions weakened noticeably, signaling a pre-holiday lull. Prices are expected to remain stable with limited volatility before the holiday. Aluminium Market Summary: The US House’s opposition to Trump’s tariffs on Canada and ongoing China-US trade talks eased trade friction concerns, improving market sentiment. However, declines in gold and silver, and a sharp US stock drop over AI concerns, pressured risk assets, offsetting some macro positives. Seasonal fundamental weakening intensified: domestic and overseas aluminium production ramped up steadily, but approaching Chinese New Year, downstream processing firms stopped production, while high prices dampened procurement demand. Enterprises’ ingot casting willingness rose, liquid aluminium proportions dropped, and inventory buildup accelerated month-on-month. Market consensus anticipates post-holiday inventory peaks near a three-year high, exerting downward pressure on aluminium prices. Bullish sentiment in nonferrous metals cooled amid high inventory. During the Chinese New Year holiday, domestic markets close while overseas markets stay open; thus, volatility risks remain from macro and international factors that could trigger post-holiday aluminium price fluctuations.