Approaching Delivery Date, Market Premiums Narrowed [SMM Spot Aluminum Midday Review]

SMM April 7 update:

SHFE aluminum 2604 fluctuated upward in the morning session, with the price center moving lower than the previous day. As the delivery date approached, some traders purchased to earn the price spread between futures contracts. Combined with limited shipments from smelters, market transactions gradually picked up. Transactions were mainly concentrated between the SMM A00 aluminum discount average price and a premium of 20 yuan/mt. The east China market shipment sentiment index was 3.31 today, down 0.03 MoM; the purchasing sentiment index was 3.64, up 0.09 MoM.

Before the market opened, central China traders' quotes continued the trend from the previous trading day, but prices edged slightly lower later. Excessive market inventory limited price increases, and with aluminum prices at elevated levels, the lack of peak-season characteristics in end-user orders constrained downstream manufacturers' buying sentiment, resulting in an overall sluggish trading atmosphere. Ultimately, actual transaction prices in the central China market ranged from parity to a premium of 30 yuan over the central China price. The central China market shipment sentiment index was 2.7 today, unchanged MoM; the purchasing sentiment index was 2.46, down 0.03 MoM.

Inventory side, aluminum ingot inventory in major consumption regions increased by 27,500 mt MoM today, with all three regions showing inventory buildup.