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★)