Sellers Show a Strong Willingness to Hold Prices Firm, While Premiums Continue to Narrow [SMM Spot Aluminum Midday Review]

SMM, March 26:

SHFE aluminum 2604 fluctuated downward in early trading. Affected by low futures levels, some sellers still withheld quotations. Shipment sentiment weakened somewhat today, and some sellers showed a clear willingness to hold prices firm. Today’s mainstream transaction prices were concentrated around the average price of the SHFE aluminum 04 contract to a premium of 20 yuan/mt. Today, the east China market shipment sentiment index was 2.63, down 0.22 MoM; the purchasing sentiment index was 3.38, up 0.11 MoM.

Over the past two days, aluminum prices fluctuated rangebound. In central China, bullish and bearish sentiment among traders and downstream processing enterprises was intertwined, overall market purchasing was relatively weak, suppliers showed no strong willingness to hold prices firm, and amid sluggish transactions, quoted premiums showed a continued weakening trend. In the end, actual transaction prices for next-month-invoice cargoes in the central China market were around a premium of 10 yuan to a discount of 10 yuan against the central China price. Today, the central China market shipment sentiment index was 2.64, flat MoM; the purchasing sentiment index was 2.4, down 0.01 MoM.

Inventory side, aluminum ingot inventory in major consumption regions fell by 500 mt MoM today, with destocking mainly coming from Gongyi. In the short term, after the Chinese New Year, aluminum ingot inventory continued its seasonal inventory buildup. Affected by bullish market sentiment, premiums were expected to remain on a narrowing trend.