U.S.-Iran negotiations uncertain, aluminum prices fluctuate and adjust

On Monday, the Shanghai aluminum futures contract closed at 23,555 yuan/ton, down 1.38%. The LME closed at $3,225.5/ton, up 1.05%. The SMM spot average price was 23,440 yuan/ton, down 630 yuan/ton, with a discount of 150 yuan/ton. The South Storage spot average price was 23,410 yuan/ton, down 650 yuan/ton, with a discount of 175 yuan/ton. According to SMM, on March 23, aluminum ingot inventories stood at 1.337 million tons, down 2,000 tons from the previous period; aluminum rod inventories in major domestic consumption areas were 357,500 tons, down 23,500 tons. On the macroeconomic front, U.S.-Iran negotiations descended into a war of conflicting accounts. U.S. President Trump stated that the U.S. and Iran had held "strong" talks and reached key agreement points, including a five-day suspension of strikes on its energy facilities. However, Iran has repeatedly denied engaging in talks with the U.S.

The US Iran negotiations are stuck in Rashomon, and market risk sentiment has been released after Trump's remarks about negotiating with Iran. However, Iran denies the news, and there is still pressure above after a slight rebound in metals. Fundamentally, domestic aluminum ingot inventory has begun to decrease slightly, and it is expected that purchasing sentiment will rebound as aluminum prices fall, which will benefit the performance of aluminum ingot inventory reduction in the future. The ongoing conflict in the Middle East overseas and the expected shortage of electrolytic aluminum supply have led to a continuous increase in LME spot premiums. The macro sentiment of aluminum prices has been dominant in recent times, continuing to fluctuate and adjust. However, with the support of supply disturbances, the extent of aluminum price adjustment is expected to be limited.