Destocking Emerged Across Multiple Regions, Boosting Sentiment for Spot Aluminum Purchases [SMM Spot Aluminum Midday Commentary]

SMM August 5:

In the morning session, the center of the SHFE aluminum 2608 contract edged slightly higher than yesterday, while downstream purchasing sentiment was sluggish. The aluminum price center moved up, and the destocking pace slowed. SHFE aluminum retreated after a rapid rise in the night session, and there were slight divergences in market quoting attitudes. Today, SHFE aluminum spot premiums and discounts mainly centered in a range from a premium of 8-40 yuan/mt to a discount of 8-20 yuan/mt. The shipment sentiment index in east China was 3.1, up 0.01 from yesterday; the procurement sentiment index was 2.86, up 0.06 from yesterday.

Today, the center of aluminum futures edged down slightly from the previous day's morning session. Coupled with relatively wide overall quoted premiums and discounts, traders in central China showed a notable willingness to hold prices firm and hold back from selling, driving market prices steadily higher, while the shipment sentiment index continued to decline. Transactions were mostly driven by hedging arbitrage by futures and spot traders, and downstream processing enterprises showed limited purchasing interest. Ultimately, actual transaction prices in central China centered around a discount of 170-200 yuan/mt against the SHFE aluminum August contract. The shipment sentiment index in central China was 2.99, down 0.2 from yesterday; the procurement sentiment index was 2.94, up 0.03 from yesterday.

In terms of inventory, aluminum ingot inventories in major consumption regions fell by 9,500 mt from the previous day, with destocking seen in Guangdong, Wuxi, and Gongyi.