Market Available Supply Releases in Large Quantities, Price Acceptance Under Pressure [SMM Spot Aluminum Midday Review]

SMM, June 23 –

In early trading, the SHFE aluminum 2606 contract fluctuated downward, with the overall trading center at the open lower than the same period of the previous trading day. Affected by the declining aluminum prices, buying sentiment in the market improved today. However, due to the high selling sentiment among some sellers bearish on aluminum prices, combined with the outflow of some warrants, the overall available supply in the market was relatively sufficient. Mainstream quotations were at a discount of 40 yuan/mt against the SHFE aluminum 07 contract, with transactions mainly at a discount of 50 yuan/mt against the same contract. Today, in east China, the selling sentiment index was 3.1, up 0.15 MoM; the purchasing sentiment index was 3.06, down 0.14 MoM.

The aluminum futures consolidated and pulled back. After the holiday, downstream processing enterprises in the central China market had low buying sentiment, still mainly digesting inventories, and overall market transactions were relatively sluggish. Moreover, premiums were in line with expectations. In recent days, a large amount of warrants flowed out, releasing a great deal of available supply in the market, and suppliers had a weak willingness to hold prices firm. Ultimately, the actual transaction price range in the central China market was around a discount of 80-110 yuan/mt against the SHFE aluminum 07 contract. Today, in the central China market, the selling sentiment index was 2.95, up 0.01 MoM; the purchasing sentiment index was 2.22, unchanged MoM.

Inventory side, today, aluminum ingot inventory in major consumption areas fell by 0.3 MoM, with destocking mainly in Guangdong and Wuxi.