East China purchasing sentiment strengthens, central China futures and spot traders' purchasing demand rises [SMM Spot Aluminum Midday Review]

SMM July 8:

In the morning session, the trading center of the SHFE aluminum 2606 contract was higher than the same period of the previous trading day. Market selling sentiment strengthened from the previous day, as some downstream players, expecting a near-term rise in aluminum prices, saw buying sentiment improve, and price acceptance by downstream was higher than yesterday. Most transactions were done at parity to a premium of 10 yuan/mt against the SHFE aluminum July contract. In east China today, the selling sentiment index was 3.07, up 0.06 from the previous day; the buying sentiment index was 3.00, up 0.20 from the previous day.

As SHFE aluminum futures continued to rebound, bearish sentiment remained strong among downstream processing enterprises and trading firms engaging in both spot and futures market in central China. These traders tended to further widen discounts to purchase large volumes to profit from the price spread, while downstream plants were constrained by end-user orders and finished product inventories, keeping their purchase willingness subdued. Ultimately, the actual transaction price range in central China was at a discount of 110-140 yuan/mt against the SHFE aluminum July contract. In central China today, the selling sentiment index was 2.87, down 0.02 from the previous day; the buying sentiment index was 2.14, up 0.04 from the previous day.

Inventory side, aluminum ingot inventories in major consumption areas fell by 0.8 from the previous day, with destocking mainly in Guangdong and Wuxi.