SHFE Aluminum Stabilizes at Highs; East China Discount Narrows as Contract Rollover Nears [SMM Aluminum Spot Midday Commentary]

SMM August 11:

In early trading, the SHFE aluminum 2608 contract continued to run at high levels, with prices above 24,000 yuan/mt somewhat curbing downstream purchases, while transactions among traders were relatively active. Today, the main trading center of spot premiums for SHFE aluminum was between 40 yuan/mt against the August contract and 20 yuan/mt against the August-October contract. In east China, the shipment sentiment index was 3.16, up 0.01 from the previous day; the purchase sentiment index was 3.20, up 0.04 from the previous day.

Aluminum futures prices continued to rise, and trading atmosphere in central China remained sluggish today. Downstream processing enterprises' buying sentiment was sluggish, with overall market trading volume remaining low. Small traders tended to dump products in large volumes at high aluminum prices, while large traders' sentiment to hold prices firm remained notable. Ultimately, actual transaction prices in central China centered around a discount of 120-140 yuan/mt against the SHFE August contract. In central China, the shipment sentiment index was 3.06, up 0.02 from the previous day; the purchase sentiment index was 2.95, down 0.01 from the previous day.

Inventory side, today's aluminum ingot inventory in mainstream consumption areas fell by 4,500 mt WoW, with Guangdong and Wuxi showing destocking.