Aluminum Prices Fluctuate at Highs, Downstream Buyers Mainly Procure Against Orders [SMM Spot Aluminum Midday Review]

SMM News, April 1:

In early trading, SHFE aluminum 2604 fluctuated downward, with its center holding flat from the previous day. Affected by elevated aluminum prices, downstream purchasing enthusiasm was not high, with procurement mainly based on orders and little inventory buildup. Market sentiment to ship was relatively strong, and spot availability was ample, driving a wider spread in market transaction premiums. Market transactions were mainly concentrated at discounts of 10 yuan/mt to the SMM A00 aluminum average price. Today, the east China market shipment sentiment index was 3.41, up 0.1 MoM; the buying sentiment index was 3, down 0.11 MoM.

With the arrival of the first trading day of April, downstream processing enterprises in the central China market entered a new order cycle, and purchase sentiment improved significantly from the previous day, driving a simultaneous increase in traders' purchase volumes. Market trading turned more active, and overall trading volume rose sharply. As trading volume increased, market transaction prices gradually moved higher, with actual transaction prices in the central China market ultimately hovering around parity to a discount of 40 yuan against the central China price. Today, the central China market shipment sentiment index was 2.76, up 0.02 MoM; the buying sentiment index was 2.42, up 0.1 MoM.

Inventory side, aluminum ingot inventory in major consumption regions increased by 3,500 mt from the previous period today, with the inventory buildup mainly coming from Gongyi and Guangdong. In the short term, after the Chinese New Year, aluminum ingot inventory continued its seasonal buildup. Affected by bullish sentiment, premiums were expected to maintain a narrowing trend.