Macro perspective: This week, the global macro front remained focused on geopolitical disruptions. On April 7 local time, US President Trump posted on social media: “I have agreed to a pause on the bombing and strikes on Iran for a period of two weeks.” Subsequently, a White House official stated that Israel had agreed to a temporary ceasefire. On the other hand, Iran’s Supreme National Security Council issued a statement saying that, based on the Supreme Leader’s recommendation and the Council’s approval, it accepted Pakistan’s ceasefire proposal.
After the US and Iran announced the ceasefire, most of the over a thousand vessels stranded in the Strait of Hormuz were still in a “wait-and-see” mode, with only a very small number passing through. Iran required all vessels to obtain permission before transiting the strait.
US President Trump stated that the US was considering “joint management” of the Strait of Hormuz with Iran. Oman said it had signed an agreement not to charge vessels passing through the Strait of Hormuz. However, as of April 9, Iranian media reported that the Strait of Hormuz had been fully closed, forcing oil tankers to turn back. The US Fed’s March meeting minutes indicated that more officials mentioned the possibility of rate hikes, and the Fed’s mouthpiece noted that the ceasefire made the Fed’s decision-making more difficult.
Fundamentals: The supply side, excluding China, is directly impacted by geopolitical conflicts, and Middle Eastern aluminium enterprises cut production. Recently, the UAE’s EGA and Bahrain’s Alba were successively hit by missile strikes, with production facilities damaged. The extent of damage was still under comprehensive assessment. The market widely expected large-scale production cuts or even shutdowns, with the global aluminium supply gap expected to widen and concerns over ex-China supply continuing to escalate. In China, the proportion of liquid aluminium rebounded in March as downstream sectors fully resumed work after the holiday, surging 9.3 percentage points M-o-M to 73.7per cent, above early-month expectations.