Expectations of Tightening Overseas Supply Heat Up; Aluminum Ingot Base Prices Rise but Processing Fees Come Under Pressure [SMM South China Spot Aluminum Daily Review]

SMM, March 4:

Aluminum ingot: Today, Foshan A00 spot aluminum was affected by the geopolitical situation in Iran, with heightened fluctuations in market sentiment. Discounts edged down slightly before recovering. Mainstream quotations against the front-month contract were -170 yuan/mt, with some cargoes quoted at -180 yuan/mt, down 10-20 yuan/mt WoW from last Friday. Intraday transactions were concentrated at -20~-10 yuan/mt. A major buyer in Foshan swept up cargoes at -10 yuan/mt. Lower-priced cargoes were relatively abundant, and a small number of quotations rebounded to near parity. Downstream purchases were mainly driven by rigid demand, with deliveries to plants at -10 yuan/mt, and overall purchasing sentiment remained sluggish.

Aluminum billet: Today, the average processing fee for SMM 6063 aluminum billet (Guangdong) was 180 yuan/mt for Φ90/100, and 130 yuan/mt for Φ120 and above, down 20 yuan/mt from yesterday. Affected by expectations of tightening overseas supply, the base price rose significantly, and aluminum billet processing fees were somewhat under pressure. Meanwhile, downstream post-holiday resumption progressed slowly, and purchases were mainly driven by rigid demand, with buyers pushing for lower prices. If aluminum futures prices continued to rise, suppliers would continue to raise processing fees, while market trading sentiment was relatively average.