East China stockpiling sentiment strengthens; central China purchasing sentiment remains subdued. [SMM Spot Aluminum Midday Review]

SMM, July 8:

During the morning session, the trading center of the SHFE aluminum 2606 contract was lower than the same period of the previous trading day. Pressured by the decline in aluminum prices, selling sentiment in the market edged down today, with some sellers holding prices firm and holding back from selling. Recently, overall downstream stockpiling sentiment has been relatively high, and downstream price acceptance improved. Market transactions were conducted at parity to a premium of 20 yuan/mt against the SHFE aluminum July contract, with mainstream transactions at a premium of 10 yuan/mt against the SHFE aluminum July contract. The selling sentiment index in east China was 2.98 today, down 0.09 WoW; the purchase sentiment index was 3.04, up 0.04 WoW.

In early trading today, SHFE aluminum underwent a slight correction. In the central China market, downstream processing enterprises showed low purchase sentiment, constrained by soft end-user orders and high finished product inventories. However, as the discount trend widened, buying sentiment from trading firms engaging in both spot and futures market stayed high, with a tendency to purchase at deep discounts, while suppliers demonstrated significant willingness to hold prices firm. Ultimately, the actual transaction price range in the central China market centered around a discount of 120-140 yuan/mt against the SHFE aluminum July contract. The selling sentiment index in central China was 2.86 today, down 0.01 WoW; the purchase sentiment index was 2.15, up 0.02 WoW.

On the inventory front, aluminum ingot inventories in major consumption areas fell 0.75 WoW today, with destocking mainly occurring in Guangdong and Wuxi.