Aluminum Price Broke Down and Lost Ground, Spot-Futures Price Spread Surged Sharply [SMM South China Spot Aluminum Daily Review]

SMM June 25:

Today the futures market broke below the 23,000 support level, and the South China spot market shifted from strong to stable. The sharp drop in absolute price combined with strong destocking prompted cargo holders to actively try to raise prices in the morning, while buyers took advantage of the dip to secure rigid demand, still managing to match transactions. However, major players aggressively raised purchase prices to make a market, fueling expectations of a significant strengthening in the spot-futures price spread. Hedging positions then seized the opportunity to increase shipments and cash out. Mainstream quotations were gradually lowered from a premium of +10 yuan/mt to a discount of -10 yuan/mt, and supply became more ample. Downstream buyers were weighed down by bearish sentiment, and their purchasing follow-through was weak. Traders remained cautious and sidelined, with fewer entering the market to buy. Supply and demand both weakened, and actual transactions turned quiet. Spot transactions were concentrated at the SHFE aluminum 2607 contract with a spread of -35 yuan/mt to +25 yuan/mt.