Strong Bullish Market Sentiment, Sellers Reluctant to Sell and Holding Prices Firm [SMM Spot Aluminum Midday Commentary]

SMM News on March 4:

In the morning session, SHFE aluminum 2602 fluctuated upward, with the price center rising from the previous trading day. Affected by the US-Iran conflict, market bullish sentiment was strong. In addition, as the current price spread between futures contracts performed well, some sellers held prices firm and were reluctant to sell, and willingness to sell declined today. Some downstream operations began stockpiling, with acceptance of aluminum prices edging higher. Today’s market quotes were mainly from the average price to a premium of 20 yuan/mt, and mainstream transactions were from the average price to 10 yuan/mt. Today, the east China market willingness-to-sell sentiment index was 2.68, down 0.27 MoM; the buying sentiment index was 3.19, down 0.03 MoM.

Geopolitics led to shutdowns of aluminum production lines in Qatar. In the central China market, traders’ bullish sentiment was strong. Although downstream processing enterprises were constrained by weaker-than-expected orders and inventories not yet fully depleted, resulting in relatively weak purchasing sentiment, overall market transactions still improved compared with the previous two days. Holders showed a more notable willingness to sell on price strength, while holding prices firm and being reluctant to sell. Ultimately, actual transaction prices in the central China market hovered around parity with the central China price to a discount of 20 yuan. Today, the central China market willingness-to-sell sentiment index was 2.69, up 0.03 MoM; the buying sentiment index was 2.32, up 0.05 MoM.

Inventory side, aluminum ingot inventory in major consumption areas increased by 5,500 mt MoM today. Affected by seasonality, all three regions saw inventory buildup. In the short term, after the Chinese New Year, aluminum ingots continued to see seasonal inventory buildup; influenced by market bullish sentiment, premiums are expected to remain on a narrowing trend.