Futures Rally Again, Premium Center Pulls Back [SMM South China Spot Aluminum Daily Review]

SMM, July 29:

The futures market extended its strong upward momentum today, while the price center of spot aluminum in South China edged down. Although rapid inventory destocking lent sellers some confidence, the synchronous climb of absolute prices and spot-futures spreads to period highs, coupled with the concentrated release of month-end capital repatriation pressure, drove holders to take profits aggressively. Selling at lower prices became mainstream, as a few who held prices firm were too isolated to mount effective resistance. Mainstream quotations fell to discounts of 30-10 yuan/mt, cargoes flooded the market, and circulation volume swelled noticeably. Buyers showed weak acceptance—downstream players shunned high prices and only sporadically took low-priced material to meet rigid production needs, while the trading segment remained restrained, selectively picking deeply discounted cargoes for contract delivery. The concentrated selling pressure on the supply side and mild uptake on the demand side created a significant mismatch, leaving intraday trading sluggish. Spot transactions were concentrated at premiums of 95-135 yuan/mt over the SHFE aluminum 2608 contract.