Rising Base Prices Fail to Stimulate Demand, Spot Aluminum Trading Sluggish in South China [SMM South China Aluminum Spot Daily Review]

SMM February 26 News:

Aluminum Ingot: On February 26, SMM A00 aluminum (Foshan) was quoted at 23,520-23,580 yuan/mt, with an average price of 23,550 yuan/mt, up 100 yuan/mt, at a discount of 145 yuan against the front-month contract. Aluminum prices rose but the spot market was under pressure. Suppliers' attempts to hold prices firm in the morning were unsuccessful, and they were forced to lower their quotes due to the dual pressures of inventory buildup and rising prices, expanding the discount range to -90~0 yuan/mt, with ample supply of circulating goods. Downstream demand is still in the early stages of recovery, showing weak willingness to rush to buy amid continuous price rise. Traders only push for lower prices and purchase as needed, leading to overall oversupply. In the later part, heightened volatility in futures prices resulted in a situation where there were prices but no transactions.

Aluminum Billet: On February 26, the average price of SMM 6063 grade aluminum billet (Guangdong) Φ90/100 was 160 yuan/mt, and the average price for Φ120 and above specifications was 110 yuan/mt, unchanged from yesterday. The increase in base prices led to a divergence in processing fees, with a significant difference between high and low prices. The downstream demand recovery was slow, and purchasing remained sluggish. The decline in futures prices further intensified the wait-and-see sentiment in the market. Some merchants lowered their quotes to hit bottom, resulting in difficult overall transactions, with weak demand being the core constraining factor.