Aluminum Price Rose, Shipments Sentiment Rose, Downstream Procurement Sentiment Was Weak [SMM Spot Aluminum Midday Review]

SMM, July 29:

In early trading, the operating center of the SHFE aluminum 2608 contract was higher than the same period of the previous trading day. Affected by weak end-use demand, overall market purchasing today was mainly for essential restocking. Due to the rise in aluminum prices, some traders showed increased willingness to sell, but overall purchase willingness was limited. Mainstream transaction prices were mainly at parity to a premium of 10 yuan/mt against the SHFE aluminum August contract. Today, the selling sentiment index in east China was 3.16, up 0.08 from the previous session; the purchasing sentiment index was 3.00, unchanged.

The recurring US-Iran conflicts disrupted the rise in SHFE aluminum prices during the night session. Today, traders and downstream processing enterprises in central China mostly stayed on the sidelines, with low purchase willingness and sluggish market transactions. Some large suppliers held prices firm and held back from selling, while small suppliers showed no obvious inclination to prop up prices, leading to a notable divergence in offers and transactions. Eventually, the actual transaction price range in the central China market was around a discount of 100-140 yuan/mt against the SHFE aluminum August contract, with a sustained weakening trend. Today, the selling sentiment index in the central China market was 3.12, up 0.01 from the previous session; the purchasing sentiment index was 2.82, down 0.04 from the previous session.

Inventory-wise, aluminum ingot inventory in major consumption regions dropped by 0.5 from the previous period, with destocking mainly occurring in Guangdong and Wuxi.